AUDUSD Breaks Through Bull Trigger As US Inflation Moderates

The AUDUSD rose to 0.6893, the highest since the end of August, after the November US CPI inflation moderated more than expected. It is currently trading around 0.6852 and outperformed the G10, except NOK. The DXY fell over a percent.

• AUDUSD broke through the bull trigger of 0.6851 but is now hovering around that level. Clearance of that point confirms the resumption of the uptrend and the next level to watch is 0.6909. On the downside the key support to watch is 0.6640, the 50-day EMA. It has been trending up since mid-October and is now above its 20-day simple MA.
• AUD finished higher against NZD overnight and is now trading around 1.0605. AUDJPY traded sideways overnight. AUD increased its gains against both EUR and GBP and is around 0.6447 and 0.5544 respectively.
• Equity markets were higher across the board last night with the S&P 500 up 0.7% and Eurostoxx +1.7%. VIX fell to 22.7%. Copper prices rose on the softer US CPI data but then gave up those gains to finish 1.2% higher. WTI oil prices rose to $76.37/bbl after the data and are now trading around $75.40. After falling to $106.20 yesterday, iron ore prices are now about $108.
• RBA Governor Lowe speaks this morning at 0930 AEDT on “An Efficient, Competitive and Safe Payments System” (see here). RBA’s head of payments policy Connolly will moderate a panel on “Is Australia ready for digital currency payments?” at 1450 AEDT. The FOMC announcement is likely to be the focus of the day and a 50bp hike is expected.