Australian Dollar is trading as the strongest one today on US-China trade optimism. But it’s going to face an important test from consumer inflation data tomorrow. CPI is expected to rise 0.5% qoq in Q3, down from Q2’s 0.6% qoq. RBA Governor Philip Lowe indicated earlier today that the central bank is “prepared to ease” monetary policy further if needed. Though, after three interest rate cuts this year, the central bank will likely stay on the sideline for a while, to let the impacts feed through to the economy. Inflation and employment are the key pieces of data to influence RBA’s decision next year.
Aussie will likely be given another lift in case of upside surprise in tomorrow’s data. AUD/USD is pressing 74.82 temporary top for now. Prior support from 4 hour 55 EMA affirms near term bullishness. Break of 74.82 will resume the rise from 71.73, as well as that from 69.95. Next upside target will be 100% projection of 69.95 to 74.49 from 71.73 at 76.27, which is close to 76.16 key resistance.
