AUD/USD splashing around near 0.6350, gearing up for Aussie CPI data drop

• The AUD/USD saw a slight gain on Tuesday, tapping 0.6379 before settling at the halfway point near 0.6350.
• US PMIs firmly trounced market expectations, but Aussie traders are looking ahead to early Wednesday CPI inflation figures.
• Next up on the data docket: Australia 3rd quarter CPI inflation, RBA Governor Bullock speech later in the day.

The AUD/USD saw an early climb on Tuesday after hawkish comments from Reserve Bank of Australia (RBA) Governor Michelle Bullock propped up the Aussie (AUD) ahead of Wednesday's Australian Consumer Price Index (CPI) inflation data due early in the Asia market session, while policy watchers will also be keeping an eye out for RBA Governor Bullock's statements on the state of the Australian economy when she testifies before the Senate Economics Legislative Committee in Canberra early Thursday.

Australia CPI Preview: Inflation data could challenge RBA tolerance

The AUD/USD climbed from Tuesday's opening bids of 0.6336 to tap into an intraday high of 0.6379 before settling back to the halfway mark near 0.6350, and Aussie investors are now gearing up for an early reading of the Aussie CPI release.

As Australia's domestic economy continues to struggle with sticky inflation that refuses to drop into the RBA's desired levels, an acceleration of Aussie inflation data could see the RBA pushed one step closer to making additional rate hikes. 

AUD will receive additional upside momentum if inflation eases less quickly than expected – Commerzbank

Australia's Monthly Consumer Price Index for the annualized period into September is forecast to chalk in a slight uptick to 5.4% against August's print of 5.2%, while the quarterly CPI figure is expected to likewise step up from 0.8% to 1.1% for the third quarter.

The RBA's Trimmed Mean CPI indicator for the year into September, meanwhile, is expected to show an adjusted decline from 5.9% to 5.0%, and investors will be watching this number closely to get a bead on where the RBA will be looking before making any decision on policy adjustments.

AUD/USD Technical Outlook

The AUD/USD has been drifting back down steadily after pinging a fresh intraday high, but still remains capped by last week's peak just north of 0.6390, and Aussie bulls will be waiting for a spark from the Australian CPI headliner before making another drive into the topside.

On the low end, technical support is building out a price floor from the 50- and 200-hour Simple Moving Averages (SMAs) after a bullish cross on the charts just above 0.6330, and a drop into the chart territory could see an extended rebound higher, while a bearish breakdown will see the Aussie set for a renewed challenge of Monday's swing low into 0.62190.

AUD/USD Hourly Chart

AUD/USD Technical Levels