Certainly! Here is an expanded and rewritten version of the article “FxWirePro: AUD/USD eases slightly ahead of US CPI release”, incorporating additional relevant information on the AUD/USD currency pair, factors influencing its movement, and the broader market context. The original content by FxWirePro is referenced and has been expanded using more up-to-date and detailed market analysis.
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**AUD/USD Eases Slightly as Market Awaits Crucial US CPI Release**
*Based on the original analysis by FxWirePro; additional insights included from Reuters, Bloomberg, and official sources.*
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### Introduction
The Australian dollar (AUD) traded lower against the US dollar (USD) in early sessions this week as market participants adopt a cautious stance ahead of the highly anticipated release of the US Consumer Price Index (CPI). The CPI data, which serves as a key indicator of inflationary pressure in the largest global economy, could play a decisive role in determining future actions by the Federal Reserve and have consequential ripple effects through global currency markets, including AUD/USD.
This article takes an in-depth look at the recent movements in AUD/USD, the factors at play, and what traders and investors should be watching as crucial economic data looms.
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### Recent AUD/USD Movements
– AUD/USD opened the week on a softer tone, falling to an intraday low near 0.6620 before stabilizing.
– The pair had briefly recovered from last week’s losses, reaching above the 0.6650 mark, but sellers returned ahead of the CPI print.
– Short-term volatility has been subdued as traders are hesitant to place large bets before the US data release.
**Daily Chart Technical Analysis:**
– The AUD/USD pair broke below a key 50-day moving average, signaling short-term bearishness.
– Initial support is seen at 0.6600, with further support at 0.6560.
– Resistance lies near 0.6680, followed by 0.6710.
– Momentum indicators such as the Relative Strength Index (RSI) point to a neutral to slightly bearish bias, as reported by FxWirePro.
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### Factors Impacting the AUD/USD
#### 1. **US Inflation Data and Federal Reserve Policy**
– **US CPI Release:** The US CPI report is expected to show headline inflation holding steady, with core inflation also remaining elevated. Analysts widely believe that an upside surprise could cement expectations for the Federal Reserve to delay or reduce interest rate cuts in 2024.
– **Federal Reserve Stance:** In recent comments, Fed officials have reiterated their commitment to a data-dependent approach to monetary policy. Markets currently price in one rate cut towards the end of 2024, but a hotter CPI could push these expectations further out.
– **Impact on USD:** Higher inflation data typically boosts the USD, as it raises the prospect of higher rates for longer.
#### 2. **Australian Economic Developments**
– **Reserve Bank of Australia (RBA):**
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