Is a Range Breakout in the Cards for AUD/USD?

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Summary:

The Australian Dollar faced headwinds against the Pound and U.S. Dollar as the latest inflation data revealed no significant surprises, potentially lowering the likelihood of an imminent interest rate increase by the Reserve Bank of Australia (RBA). This article delves into the details of the inflation report, its impact on the Australian Dollar, and the technical analysis suggesting potential further downside.

SELL AUDUSD

Close Time

CLOSED

0.63400

Entry Price

0.62000

0.64400

0.66437 +0.00054 +0.08%

34.2

Pips

Profit

0.62000

0.63058

Exit Price

0.63400

Entry Price

0.64400

The Australian Dollar (AUD) recently faced a setback against major currencies like the Pound (GBP) and U.S. Dollar (USD) following the release of crucial inflation data. This article explores the implications of this data, its effects on the AUD exchange rates, and provides technical analysis insights for traders.

Inflation Data Release

The focal point of this development was the release of Australia's weighted mean inflation figures. This data provides a monthly snapshot of price dynamics, offering markets an initial glimpse into the likely trajectory of the more comprehensive quarterly inflation figures.

The headline figure indicated a 5.2% year-on-year increase in inflation for August, up from 4.9% in July. Moreover, there was a notable 0.8% increase in monthly inflation, primarily attributed to surging global energy prices.

Australian Dollar's Reaction

In the immediate aftermath of the inflation data release, the Australian Dollar depreciated against both the Pound and U.S. Dollar. AUD/USD for instance, saw a decline of nearly half a percent, falling from 0.6405 to 0.6376.

Technical Analysis

Is a Range Breakout in the Cards for AUD/USD?_1

AUD/USD has moved below the 0.6360 mark, marking its lowest point in approximately two weeks. She adds that if the pair breaches the year-to-date low of 0.6357, it may experience further depreciation, possibly shedding another cent or two. Weakness in risk sentiment is also weighing on AUD/USD. With AUDUSD breaking below its trading range. Traders are keeping a close eye on potential pullbacks for an additional downward leg, contingent upon the bearish momentum.

TRADE RECOMMENDATION

SELL AUDUSD

ENTRY PRICE : 0.6340

STOP LOSS : 0.6440

TAKE PROFIT : 0.6200

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