Tonight at 8:30 pm Eastern Time, the Australian Bureau of Statistics will release new Aussie CPI data tonight, providing two key measurements of inflation. Quarter-over-quarter CPI, as well as quarter-over-quarter ‘Trimmed Mean’ CPI (which excludes the 30% most volatile items), will be made available to the public. CPI is forecast to increase by 1.6% and Trimmed Mean CPI by 1.5%; if the real numbers exceed these expectations, AUD could experience further bullish momentum following a multiyear downtrend. However, if the reports fail to meet market forecasts, AUD may see a continuation of these longform downtrends across pairs. You can check on the results here.
Thus far, Australia’s annual inflation (currently sitting at 6.1%) has lagged behind that of many other countries, giving the Reserve Bank of Australia little reason to indulge in comparable hawkishness. With over 67% of institutional traders shorting the Australian Dollar, both fundamentals and sentiment currently weigh against the currency, making the likelihood of the latest Australian CPI data becoming a bearish fundamental catalyst for AUD quite plausible.
Best Pairs to Watch
For those interested in shorting the Australian Dollar, the following two pairs are viewed favorably for AUD bears by the EdgeFinder, A1 Trading’s market scanner. They are listed below with their respective ratings, signals/biases, and corresponding charts.
1) AUD/NZD (Receives a -6, or ‘Strong Sell’ Signal)
2) AUD/USD (Receives a -4, or ‘Sell’ Signal)