The AUDUSD currency pair was trading up 13.3 pips (0.19%) at writing as the Australian dollar attempted to rally against the US dollar but was making little progress as most other pairs traded sideways.
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The release of the much-awaited US CPI data for December did not significantly impact the markets since the data met analysts’ and investors' expectations. The headline CPI figure came in at an annualised 6.5%, while the core CPI was recorded at 5.7%.
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The inflation figures were in line with expectations resulting in the US Dollar Index trading flat, while most major currencies traded flat against the world’s reserve currency. This week's lack of direction that has dominated the Forex markets still persists.
Given that the US inflation data was the main highlight of the week, it is safe to say that the AUDUSD will likely continue to trade sideways tomorrow as the week ends, extending the tight trading range that has been in place since Monday.
However, periods of minimal volatility tend to be followed by high volatility. Therefore, I wouldn’t be surprised to see most currency pairs moving significantly next week to compensate for the lack of action this week.
Still, we cannot know for sure until next week. Suppose the lack of movement persists into next week. In that case, most market participants will start preparing for major moves in the future since the longer a sideways trading pattern persists, the more volatile the breakouts tend to be.
There are no releases scheduled from the Australian docket for tomorrow. Hence, the pair will likely have another quiet trading session unless some geopolitical event triggers volatility.
Investors and traders tend to profit in trending markets; hence, many will look forward to next week when some crucial releases are scheduled. For example, Chinese quarterly GDP figures and Canadian inflation data are scheduled for Tuesday.
Given the close trade ties between the two countries, the Chinese GDP growth data will likely affect the Australian dollar.
*This is not investment advice.
The AUDUSD price chart.
The AUDUSD currency pair was trading up 13.3 pips (0.19%) as the Aussie attempted to rally against the Greenback.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.