A$ Range Trading, CPI Coming Up

Most G10 currencies moved in narrow ranges on Tuesday, including the Aussie. It was one of the better performers, behind the yen and Swiss franc, helped by stronger equities but is only moderately higher against the greenback at 0.6544. It traded in a 30pip range with the intraday high of 0.6558 during the early European session as the US dollar weakened on lower yields. The USD index ended the day flat.

• The downtrend that started on December 28 remains intact and recent gains in AUDUSD seem to be corrective. Clear resistance at 0.6574, 50-day EMA, remains and a clear break is needed for a stronger recovery in the pair. The bear trigger is at 0.6443, February 13 low.
• AUDNZD is off its intraday high of 1.0631 but is still up 0.1% on the day at 1.0605. The RBNZ decision is at 1200AEDT and the press conference at 1300AEDT with both expected to drive the pair today (see RBNZ Preview).
• AUDJPY range traded through the European/US sessions and is down 0.1% to 98.48. AUDEUR is 0.1% higher at 0.6033 and AUDGBP +0.1% to 0.5159.
• Equities were stronger with the S&P up 0.2% and the Euro stoxx +0.4% but the FTSE was flat. Oil prices were stronger again with Brent up 1.1% to $83.40/bbl. Copper is 0.3% higher and iron ore is stronger at close to $117/t.
• Today January CPI is expected to print slightly higher at 3.6% and Q4 construction work post a rise of 0.6% q/q.