AUD/USD: Bulls take a breather below 0.7565 hurdle ahead of US GDP

• AUD/USD seesaws around monthly high, retreats of late.
• Strong RBA Trimmed Mean Inflation prints join global central bank actions to favor bulls.
• Softer yields, mixed US data weigh on USD to offer additional upside momentum.
• Australia’s Import-Export Price Index, RBA’s Debelle can entertain traders ahead of Q3 US GDP.

AUD/USD seesaws around monthly high, despite recently easing to 0.7520 during the four-day uptrend at the start of the key Thursday.

The risk barometer pair previously benefited from a jump in the Reserve Bank of Australia (RBA) preferred inflation gauge before the global central banks portrayed tapering moves. However, the bulls are recently cautious ahead of the speech from RBA Deputy Governor Guy Debelle and preliminary readings of the US Q3 GDP.

Australia’s headlines Consumer Price Index (CPI) matched 0.8% QoQ forecast for the third quarter (Q3) release while the YoY figures eased below 3.8% prior and 3.1% market consensus to 3.0%. However, it was the RBA Trimmed Mean CPI that lured the bulls with a six-year high yearly print of 2.1%, versus 1.8% expected and 1.6% prior. The central bank’s preferred gauge of inflation rose past 0.5% market forecast and previous readouts to 0.7% on QoQ.

With the inflation figures back to the RBA’s 2-3% target range for the first time since 2015, the Aussie central bank is likely rushing towards the rate hike and joining its Western pals. Such speculations propelled the Treasury bonds at home to a multi-year high, before retreating a bit and fueling the AUD/USD prices.

In addition to the increasing hopes of the RBA’s rate hike, the UK’s cut in bond issuance and the Bank of Canada’s (BOC) end of tapering were additional signals that the global central bank is more confident, which in turn fuelled AUD/USD due to its safe-haven allure.

Elsewhere, a lower-than-expected US Good Trade Balance and improvement in Durable Goods Orders probed the US dollar bulls ahead of the key Q3 GDP. The same joined the optimism at other central banks and weighed on the US Treasury yields, as well as the US Dollar Index (DXY). It should be noted, however, that the equities were mixed and the commodities dropped as risk-averse traders await the key US data amid Fed tapering tantrums.

Read: US Third Quarter GDP Preview: A most uncertain estimate

While the US Q3 GDP will be important for AUD/USD moves, RBA’s will be eyed more closely for immediate moves as the Aussie policymakers previously highlighted the need for firmer wages to accept the reflation fears. Hence, any hints of the firmer inflation pushing the RBA towards a rate hike will be welcomed with zeal by the AUD/USD buyers while an otherwise case may take clues from the pre-US GDP sentiment to probe the upside moves.

Technical analysis

Although AUD/USD bulls seem to have tired below the 200-DMA near, the monthly support line and a hidden bullish divergence, a condition where prices make lower high but the RSI prints higher high, keeps the upside momentum intact. Hence, even a short-term pullback remains less convincing until the quote stays beyond the stated support line around 0.7495. However, the 200-DMA level close to 0.7565 acts as the key hurdle to watch during the fresh run-up.