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If you missed yesterday’s U.S. inflation drama, then you’ll probably get a chance to sneak in pips with the PPI release.

I’m looking at AUD/USD’s support zone ahead of the event!

Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD’s Reverse Head and Shoulders pattern ahead of the U.S. CPI release. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. inflation eases from 8.5% to 8.3% in August, less cooler than expected dip to 8.1%

U.S. budget deficit widens to $220B in August, up by 29% from the same month last year

NZ current account deficit narrows from 6.5B NZD to 5.22B NZD in Q2 2022

Japan’s core machinery orders surprisingly gain by 5.3% vs. 0.6% decline expected in July

Japan September factory mood retreats from seven-month highs on cost pressure: Reuters Tankan

AU new home sales down by another 1.6% in August after 13.1% slide in July

Japan’s industrial output revised lower from 1.0% to 0.8% in July

Asian shares extend global selloff amid bets on more aggressive Fed

Dollar pushes towards fresh 24-year peak versus yen after U.S. CPI shock

Japan’s finance minister says FX intervention among options to combat yen falls

U.K. inflation slows from 10.1% to 9.9% in August vs. 10.2% expected

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. PPI reports at 12:30 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
NZ quarterly GDP at 10:45 pm GMT
Japan’s trade balance at 11:50 pm GMT
AU labor market data at 1:30 am GMT (Sept 15)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: AUD/USD

AUD/USD 4-hour Forex Chart

AUD/USD 4-hour Forex Chart

Yesterday’s U.S. session trading was an unfortunate one for risk assets like AUD as Uncle Sam’s CPI report pointed to the Fed raising its interest rates by 75 to 100 bps this month.

AUD/USD, which had been consolidating just under .6900, fell sharply to the .6730 zone.

Will we see more AUD selling or USD buying today?

AUD/USD is flirting with the .6700 psychological handle that has served as support for the pair at least twice since mid-July.

Stochastic is also favoring the bulls while it hangs out in the oversold territory.

But AUD/USD’s next direction will probably depend on today’s U.S. PPI report and overall risk sentiment.

Markets see headline producer prices dipping by another 0.1% after a 0.5% decline in July. Meanwhile, core PPI is expected to rise by 0.3% after a 0.1% uptick last month.

If today’s PPI releases tell us that prices aren’t falling as much as we (or more importantly the Fed) want, then traders could continue to price in a hawkish Fed and drag risk assets lower.

AUD/USD could break below .6700 and revisit 2020 levels near .6500.

If we see much lower figures, though, or if traders decide to take profits from their USD buying, then AUD/USD could bounce from its support zone.

The pair could return to the .6800 area of interest if not its .6900 pre-CPI levels.