Global macro overview for 25/01/2017:
The inflation data or Consumer Price Index from Australia was released overnight and it widely surprised market participants. The fourth quarter CPI was worse than anticipated: the consensus suggested an increase of 0.7% q/q (1.6% y/y) after a 0.7% (1.3% y/y) gain from the previous quarter, but the score released was at the level of 0.5% only (1.5% y/y). This result is weak, but will not prompt an immediate Reserve Bank of Australia response in form of a rate cut at the next meeting in February. The RBA is more likely to cut the rates in May and August as they are known for a wait-and-see approach towards the inflationary pressures.
Let’s now take a look at AUD/USD technical picture after the news was released. The market immediate response was a sell-off from the recent highs at the level of 0.7609 and currently the market is trading at the technical support at the level of 0.7523. Nevertheless, the price is still hovering above all of the moving averages, so any break out below 0.7485 area will be another bearish signal.
The material has been provided by InstaForex Company – www.instaforex.com
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