The Australian dollar traded in a range bound pattern against the US dollar during last weeks trading session leaving the pair without a clear direction. In Australia, a government report on Wednesday showed that consumer price inflation rose 0.5% in the third quarter, more than the expected 0.4% increase. Year-on-year, Australia’s CPI rose 2.3% in the last quarter, in line with expectations, after an increase of 3.0% in the second quarter.
Weekly bias remains neutral in the pair. However a breakout of this range would provide a clear direction. A buy trade can be initialized for a reversal if we get a clear break of 0.88971 resistance as the pair formed a support on 0.86416 ( the pairs lowest this year). on the downside a break of 0.86416 support would resume the current bearish trend in the pair.
In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up asset purchases under its third round of quantitative easing.
Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.