This morning's CPI numbers have the AUD on a run. The buyers appear to reason that higher than expected inflation makes a rate cut less likely. However, expectations were already at lower levels, so this strength could be a temporary phenomenon. And there's a technical set up that may have traders itching to sell.
The daily chart above shows today's move takes AUD/USD to both a resistance level and the upper Bollinger band. The band is at 0.7712, and the high is .7709, so under a magnifying glass the market missed breaking the upper band. Traders will exercise their own discretion, but the shape of the move is more imporatnt to me, and I'm calling a reversion. Importantly, the bands are not widening, suggesting the rejection of the band is a more reliable signal
I'm a seller here, with a stop loss at 0.7726, looking to take profits on any approach to 0.7445.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.