**AUD/USD, GBP/USD OUTLOOK: AU JOBS, UK DATA DUMP, US INFLATION IN FOCUS**
*By Matt Weller, Senior Market Analyst, FOREX.com*
The forex market is entering another pivotal week with investors’ attention glued to the release of critical economic data from Australia, the UK, and particularly, the United States. The inflation backdrop remains central to currency valuation dynamics as global central banks search for justification for rate cuts while juggling economic resilience and price pressures.
Amid this complex web of data releases and policy signals, the AUD/USD and GBP/USD pairs are poised for heightened volatility. This article delves into the fundamental and technical underpinnings that could drive price action for both currency pairs in the days ahead.
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### US INFLATION DATA: A KEY DRIVER FOR MAJOR PAIRS
For months, forex traders have watched US inflation readings with keen interest as every data point either emboldens or tempers market expectations of Federal Reserve action. The US Bureau of Labor Statistics releases the latest Consumer Price Index (CPI) report, which will influence global risk appetite and the directionality of the US dollar.
**Why is US Inflation So Important Right Now?**
– US core inflation has remained sticky, prompting the Fed to reiterate its higher-for-longer policy stance.
– Market participants have priced in fewer and later rate cuts compared to earlier in the year, lifting the greenback.
– Any deviation in CPI data could reshape the yield curve and reverberate across global currency markets, given the USD’s role as the reserve currency.
**Upcoming CPI Data Points:**
– Consensus estimates expect headline CPI to moderate on a year-over-year basis, but the core reading will capture most attention.
– A stronger-than-expected print may extend USD strength, putting downward pressure on both AUD/USD and GBP/USD.
– Conversely, a softer reading could reinvigorate market hopes for a September rate cut.
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### FOCUS ON THE AUSTRALIAN DOLLAR: JOB MARKET IN FOCUS
The Australian dollar has struggled for direction in recent weeks, weighed down by a lack of clear monetary policy signals from the Reserve Bank of Australia (RBA). Much of the uncertainty stems from mixed domestic data and global risk sentiment buffeted by moves in the greenback.
This week, the spotlight will fall on Australia’s employment data, which should serve as a litmus test for the RBA’s evolving stance.
#### Key Fundamentals for AUD/USD:
– **RBA’s Current Stance:** The RBA left rates unchanged in its latest policy meeting, with Governor Michele Bullock walking a tightrope between acknowledged inflation risks and labor market resilience.
– **Employment Numbers:** The monthly jobs report could tip the scales. A robust jobs gain alongside brisk wage growth would bolster expectations of tighter policy, supporting the Aussie dollar.
– **Global Risk Tone:** Since the AUD is highly sensitive to global growth signals, weak US inflation or dovish Fed commentary could dilute USD strength, helping AUD/USD find a floor.
#### AUD/USD Technicals:
– The pair has found technical support in the 0.6550–0.6600 zone, a region aligned with the early 2024 lows.
– Upside resistance is evident near 0.6700, with additional hurdles around 0.6750, a level coincident with the 200-day moving average.
– Technical indicators suggest the pair is in a wait-and-see mode, awaiting a catalyst from either the jobs data or broader USD momentum.
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### POUND STERLING: UK DATA DUMP AWAITS
For GBP/USD traders, focus shifts sharply to the deluge of data from the UK, especially after the recent Bank of England (BoE) meeting which saw policymakers adopt a slightly more dovish than expected posture.
#### Key Data Releases Impacting GBP/USD:
– **UK GDP:** The monthly GDP report will show whether the UK economy is tentatively recovering from
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