AUD/USD Falls To The Lowest In 3 Months On Poor Inflation
Inflation is absent in almost all developed economies and Australia is not an exception. The headline Consumer Price Index advanced by 0.6% in Q3, lower than 0.8% expected. The Trimmed Mean CPI (known as core CPI in other places) also failed to impress with an increase of 0.4% q/q against 0.5% projected.
Year over year, inflation loses the holy grail of @5 and stands at 1.8% for both headline and trimmed CPI. This is not a bullish sign. In addition, another measure, the weighted media, is up only 0.3% against 0.5% predicted.
AUD/USD responded with a downfall, reaching a low of 0.7715, the lowest since July 13th, when it was making its way up, eventually peaking at 0.8127 in September.
On the way down, the pair slipped under the 0.7735 level which was a low point earlier in October. Further support awaits only at 0.7635, which capped the pair in July and then at 0.7550. Resistance is at 0.7775.
The Reserve Bank of Australia maintains a neutral bias, but a recent comment suggested that the next move could be to the downside rather than the upside. The inflation data strengthens that notion.
Here is the daily chart with support and resistance lines drawn on it. More: Elliott Wave Analysis: AUDUSD and USD Index
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