The Aussie/U.S. dollar currency pair made a strong and firm break below the 0.7512 bearish level and the lower corrective channel line. The U.S. dollar/Swiss franc currency pair is trading higher today, unfolding a nice and clear bullish structure from the 0.9786 low.
The forex markets were relatively calm today. All eyes were on Wall Street as investors tried to gauge the appetite for risk as the indices bounced around key levels after their significant falls the day before.
Key data from Australia and China will be released in the early hours of Thursday, followed by inflation figures from the U.S. later on in Thursday’s session. Thursday’s data releases could have a big impact on the Aussie dollar, especially the AUD/USD pair.
The U.S. consumer price index measure of inflation rose 0.1% month-over-month in July but failed to match expectations of a 0.2% rise as we had envisaged in our Australian dollar/U.S. dollar (AUD/USD) currency pair report earlier.
Arguably the most important data for this week will be released later on today: the U.S. Consumer Price Index. Both headline and core CPI are expected to have risen 0.2% month-over-month in July. On a year-over-year basis, CPI is seen rising to 1.8% from 1.6% in June, while core CPI is expected to have remained unchanged at 1.7% last month. If the Producer Price Index (PPI) measure of inflation is anything to go by then CPI may also miss expectations. If so, the U.S. dollar could resume its downtrend, which could underpin buck-denominated precious metals further in these times of heightened geopolitical uncertainty.