Daily Report: Aussie Consolidates after RBA Minutes

Aussie is trading in tight range above 0.9 against dollar after earlier dive this week. The RBA minutes for September meeting reiterated the central bank’s neutral stance to keep interest rate at current level of 2.50% for a period of time. Also, it also maintained the message that exchange rate of the currency remains above its fundamental value. Meanwhile, RBA showed concern over speculations in the housing markets. It highlighted the risk that over speculation could set up for steep fall in property prices later. And the main risks would be on the “stability of the macro economy rather than the financial system” if households cut back their spending in response to declines in wealth.

Elsewhere, dollar continues to consolidate against other major currencies as markets await FOMC policy statement later this week. The main focus is on whether FOMC would drop “considerable time” in reference to when Fed would starting hiking rates after stopping the asset purchase program and associated vote on the change in language. Sterling is slightly softer in tight range ahead of the Scottish Independence vote. Swiss Franc is also in consolidation against Euro ahead of SNB rate decision.

As for today, UK inflation data will be a focus as CPI is expected to be unchanged at 1.6% yoy in August. German ZEW economic sentiment is expected to drop to 5.6 in September while Eurozone ZEW is expected to drop to 21.3. US PPI is expected to climb to 1.8% yoy in August as PPI core would climb to 1.7% yoy.

Daily Pivots: (S1) 0.8992; (P) 0.9020; (R1) 0.9057; More…

A temporary low is in place at 0.8983, just ahead of 61.8% retracement of 0.8659 to 0.9504 at 0.8982. Intraday bias is turned neutral for some consolidations. Upside of recovery should be limited below 0.9236 resistance and bring another decline. Sustained break of 0.8982 will set up retest of 0.8659 low.

In the bigger picture, price actions from 1.1079 are viewed as a medium term correction. At this point, we’re still slightly favoring the case that such correction is completed at 0.8659 already, ahead of 50% retracement of 0.6008 to 1.1079 at 0.8544. However, such view is dampened by the fact that AUD/USD failed to sustain above 55 weeks EMA and was rejected from there. Further downside acceleration could extend the correction from 1.1079 through 0.8659 to 0.8544 fibonacci level and below.

AUD/USD 4 Hours Chart

AUD/USD Daily Chart

GMT
Ccy
Events
Actual
Consensus
Previous
Revised
01:30
AUD
RBA Minutes

08:30
GBP
CPI M/M Aug

0.40%
-0.30%

08:30
GBP
CPI Y/Y Aug

1.60%
1.60%

08:30
GBP
Core CPI Y/Y Aug

1.80%

08:30
GBP
RPI M/M Aug

0.50%
-0.10%

08:30
GBP
RPI Y/Y Aug

2.50%
2.50%

08:30
GBP
PPI Input M/M Aug

-0.20%
-1.60%

08:30
GBP
PPI Input Y/Y Aug

-6.60%
-7.30%

08:30
GBP
PPI Output M/M Aug

-0.10%
-0.10%

08:30
GBP
PPI Output Y/Y Aug

-0.20%
-0.10%

08:30
GBP
PPI Output Core M/M Aug

0.00%

08:30
GBP
PPI Output Core Y/Y Aug

0.90%
0.90%

09:00
EUR
German ZEW (Economic Sentiment) Sep

5.6
8.6

09:00
EUR
German ZEW (Current Situation) Sep

42
44.3

09:00
EUR
Eurozone ZEW (Economic Sentiment) Sep

21.3
23.7

12:30
CAD
Manufacturing Shipments M/M Jul

1.10%
0.60%

12:30
USD
PPI M/M Aug

0.10%
0.10%

12:30
USD
PPI Y/Y Aug

1.80%
1.70%

12:30
USD
PPI Core M/M Aug

0.10%
0.20%

12:30
USD
PPI Core Y/Y Aug

1.70%
1.60%

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