AUD/USD is trying to snap an eight day losing streak
Price is holding higher so far on the session though gains have been limited after having ran into resistance and offers at 0.6900.
The slight nudge higher today comes after Australia Q2 CPI data beat estimates, though it’s hard to argue that it will lead to sustainable gains in the currency in the medium-term.
The RBA’s preferred measure of inflation – trimmed mean reading – showed no change to Q1 and continues to sit well below the target range of between 2% and 3%.
If anything else, that just further indicates that inflationary pressures aren’t going anywhere and the RBA may still need to do more to deliver on that front (Q4 looks most likely).
Going back to AUD/USD, the near-term chart shows that sellers are in control as price action sits below 0.6900 as well as both key hourly moving averages. As long as that remains the case, it will be tough for buyers to look towards any sustained recovery.
The bigger picture also doesn’t suggest that the bounce today holds much significance just yet. Price did lean on support around 0.6865 but buyers still have more work to do in order to try and regain momentum towards the upside.
The next key risk event for the pair today is of course the Fed. The US central bank’s communique will be the deciding factor for whether or not we’ll see further near-term reprieve on a bounce off 0.6865 or if sellers will gain more conviction to drive price towards the year’s low at 0.6832 next.