AUD/USD and Consumer Price Index: a Technical Analysis
The Asian-Pacific trade market is on a down roll at the moment. Wall Street and S&P 500 signaled a bearish trend at the end of the previous week. Opening the current week could be difficult unless the market has the key to open the gates for a bull.
Wall Street indicated that the market would remain on the lower side. S&P 500 stated that markets closed by 2.8% lower. An element that has been factored through the fall of the numbers is less confidence in asserting that the Fed will tighten the rates with a hike.
On the green side, the United States of America added 263k jobs, with an unemployment rate lower by 3.5% in September.
It does less good as the Fed is still estimated to raise the rate amid growing inflation compared to the previous year and month’s figures. The 2-Year yield could rise 8 basis points during the trading session in NY.
What causes the worry for a rate hike are Overnight Index Swaps and Funds Future pricing a hundred percent chance. The Federal Reserve is scheduled to have a meeting next month. If reports and talks are to be believed, then a hike of 75 bps is inevitable.
USA Consumer Price Index, it will roll out on October 13, 2022. A picture painted by the growing inflation looks less impressive. Add more colors, and it could still be a mess.
Inflation is estimated to walk around 6.5% compared to the previous year and 6.3% compared to the previous month. These estimates give strength to the market reports but not to the market, which looks to have decent numbers for growth.
One way or another, inflation control measures will be implemented as the environment is in dire need of that pinch.
AUD/USD will feel the impact of the actions. Conditions prevailing as per the trend signal a further downfall for the pair. The Reserve Bank of Australia was a little late in implementing the tightening measures. At an international level, the Fed’s decision to hike the rate will haunt the region with a never-ending ride on the bear. The MACD Oscillator turned negative to go below the single line.
Many reports have been drafted with experts, especially the Australian brokers, trying to look for a star but in vain. Conditions are less likely to improve in the coming days, and AUD/USD will have no room to breathe. A magical snap could bring back the golden days, provided the written fiction becomes a reality.
The trading pair will act on a macro level to affect individuals indirectly. Other factors, however, will hit them directly on the not-so-sweet spot.