Australian Dollar (A$) CPI Outlook

Australian Dollar (A$) CPI Outlook

Australia’s Consumer Price Index (CPI) climbed an annualized 2.1% after expanding 1.5% during the last three-months of 2016, while the core rate of inflation increased 1.9% during the same period amid forecasts for a 1.8% print. Signs of slower-than-expected inflation may encourage the Reserve Bank of Australia (RBA) to preserve the record-low cash rate for the foreseeable future as ‘indicators of household consumption had been a little weaker than expected, which was consistent with softer conditions in the labour market.’ Despite the stickiness in the core rate, the Australian dollar lost ground following the CPI report, with AUD/USD slipping below the 0.7500 handle to end the day at 0.7472.

  • Australia Consumer Price Index (CPI) to Expand Annualized 2.2%- Highest Reading Since 2014.
  • Core Rate of Inflation to Slow from Fastest Pace of Growth Since 2015.

Technical Analysis

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 0.77.

The projected upper bound is: 0.81.

The projected lower bound is: 0.79.

The projected closing price is: 0.80.


A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 66.2102. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 74.94. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 122 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 73. This is not a topping or bottoming area. The last signal was a sell 3 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.002 at 0.796. Volume was 4% above average (neutral) and Bollinger Bands were 135% wider than normal.

Open High Low Close Volume___
0.793 0.798 0.788 0.796 84,857

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 0.79 0.76 0.75
Volatility: 12 9 10
Volume: 83,970 81,614 97,095

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


FOREX AUD= is currently 5.6% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AUD= (mildly bullish). Our trend forecasting oscillators are currently bullish on AUD= and have had this outlook for the last 36 periods. Our momentum oscillator is currently indicating that AUD= is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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Ivy Heffernan

Ivy Heffernan, student of Economics at Buckingham University. Junior Analyst at HeffX and experienced marketing director.

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