AUD/USD was stuck near 0.6600, ahead of the Australian CPI.

• AUD/USD continues to cycle around the 0.6600 handle.
• Australian CPI in the fourth quarter of 2023 is expected to show further inflation easing.
• The US Federal Reserve interest rate call and NFP labor figures are expected to weigh on the rest of the trading week.

AUD/USD cycled in a familiar pattern around the 0.6600 price range on Tuesday. Antipodeans are bracing for a new print of Australian Consumer Price Index (CPI) inflation figures with the US Federal Reserve’s next interest rate decision (Fed0 per barrel on Wednesday). U.S. nonfarm payrolls (NFP) labor figures scheduled for Friday.

Australia’s QoQ CPI is expected to be lowered to 0.8% from 1.2% in the previous quarter, and the Reserve Bank of Australia’s (RBA) annualized fourth quarter trimmed average CPI is also expected to be lowered to 4.3% from 5.2%.

Australian Monthly CPI Preview: Inflation expected to ease further.

This week’s heavy hitters revolve around another interest rate decision from the Federal Reserve and a one-two punch on Friday’s US NFP labor data. The Federal Reserve is expected to keep interest rates on hold this week, but cut-hungry investors are having a hard time giving up on a March rate cut, with 44% of the interest rate swap market still hoping for a rate cut by March. On CME’s FedWatch tool.

This week’s US NFP index is expected to show some cooling in the US labor market, with January’s NFP expected to be 180K compared to December’s 216K. The market has routinely underperformed NFP forecasts recently, and investors could be in for a rate tantrum as a healthy U.S. labor market reduces the likelihood of a rate cut anytime soon.

AUD/USD Technical Outlook

AUD/USD continues to hover around 0.6600, with intraday price action rotating through key price levels, with near-term momentum supported by the bullish slope of the 200-hour simple moving average (SMA) rising to 0.6590.

The daily candlestick is supported by the 200-day SMA at 0.6570 and AUD/USD is consolidating into the midrange, getting stuck in a tight congestion zone between the 50-day SMA and 200-day SMA.

AUD/USD hourly chart

AUD/USD daily chart