- Aussie under pressure amid risk aversion.
- US Dollar rises after a three-day negative streak, ahead of US CPI.
- AUDUSD drops more than a hundred pips from Tuesday’s high.
Awaiting CPI numbers
The day before the release of the October US Consumer Price Index, the Greenback is gaining support and is rising after three days of consecutive losses. So far, the midterm elections showed no major surprises having a limited market impact. The focus is on the CPI due tomorrow which is expected to show inflation at 8%.
Earlier on Thursday, the Melbourne Institute will release the Survey of Consumer Inflationary and Wage Expectations. Inflation expectation were expected to rise from 5.4% in October to 5.7% in November.
The AUDUSD weakened as Wall Street and metals turned negative for the day. US yields are now lower, on a session without a clear direction. It the negative tone prevails in markets, more losses in the pair seem likely.
On Tuesday AUDUSD reached its highest level in seven weeks at 0.6550. The Aussie failed to consolidate above 0.6500 and is back under 0.6450 and also under the 20-Simple Moving Average in the 4-hour charts. The next support might be located at 0.6405/10.
A recovery above 0.6500 would remove the bearish pressure, exposing the recent high at 0.6550, with interim resistance at 0.6520.