**AUD/USD and GBP/USD Price Action Setups Ahead of US CPI and FOMC: A Comprehensive Analysis**
*Credit: Content based on analysis featured on Forex Factory by Justin Bennett, expanded and supplemented with additional insights.*
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### Introduction
Global forex markets are braced for heightened volatility as traders await pivotal economic events from the United States. With the publication of the latest US Consumer Price Index (CPI) data and the Federal Open Market Committee (FOMC) policy decision, pairs like the AUD/USD and GBP/USD are at critical junctures. These releases often generate sharp movements as traders adjust their positions in response to evolving expectations surrounding inflation and interest rates.
In this article, we analyze the key technical levels and price action setups for both pairs, drawing from Justin Bennett’s analysis and incorporating relevant input from market commentary and recent technical developments. Traders are advised to exercise caution as the markets transition through this eventful period.
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### Macro Backdrop: US Economic Events
#### Why US CPI Matters
The Consumer Price Index is one of the most closely-watched metrics for inflation in the United States:
– Higher-than-expected CPI figures can suggest persistent inflation and may push the US Federal Reserve toward maintaining or even further increasing interest rates.
– Lower readings generally reduce pressure on the Fed to hike, fostering a softer US dollar.
– CPI outcomes influence global risk sentiment, often causing major currencies like the Australian dollar (AUD) and British pound (GBP) to experience substantial swings.
#### Importance of the FOMC Meeting
The FOMC’s policy decision, statements, and economic projections offer direct insight into the Fed’s monetary policy stance:
– Any hints at rate hikes, cuts, or changes to the policy outlook can trigger pronounced moves in USD pairs.
– Investors closely scrutinize the “dot plot” (projections of future interest rates) and Chair Powell’s press conference, searching for guidance on the Fed’s bias.
– Shifts in the tone regarding inflation risks or growth challenges are quickly priced in by the market.
With both events scheduled closely together, anticipation is running high in the forex community.
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### AUD/USD Technical Analysis
The Australian dollar has spent much of the recent period consolidating against the greenback, moving within a defined range. The reaction to upcoming US data could determine whether the pair resumes a broader trend or continues sideways.
#### Daily Chart Structure
Key technical observations for AUD/USD:
– The pair has bounced sharply from the 0.6580 support region, an area that has functioned as both support and resistance in the past.
– Overhead, resistance is marked near the 0.6700 handle, a level where price has repeatedly stalled.
– The longer-term descending trend line, active since the pair peaked in July 2023, remains intact and could reinforce any overhead barriers.
– Neutral momentum indicators, such as the RSI and MACD, underscore the current indecisiveness.
#### Price Action Considerations
– A sustained break above the
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