AUDCHF is taking a hit today, continuing a drop launched in the middle of May 2024. The move lower today is fuelled by release of macro data from Australia during the Asia-Pacific session.
Current account balance for Q1 unexpectedly showed a deep A$4.9 billion deficit, while gross company profits in Q1 dropped much more than expected. On the other hand, business inventories climbed more than expected. A weaker-than-expected data paves the way for a potentially weak Q1 GDP reading, which is scheduled for tomorrow, 2:30 am BST, and is now expected to show a 0.2% QoQ advance.
Traders were also offered a CPI reading for May from Switzerland today. This data came mostly in-line with expectations, with headline CPI staying unchanged at 1.4% YoY. Monthly headline reading came in slightly lower than expected and this seems to have driven post-release CHF weakening. However, CHF has already recovered from those losses and, overall, today's CPI reading boosts chance that SNB will deliver another rate cut at June 20, 2024 meeting.
Australia, data for Q1 2024
- Current account balance: -A$4.9 billion vs +$5.6 billion expected
- Business inventories: +1.3% QoQ vs +0.8% QoQ expected
- Gross company profits: -2.5% QoQ vs -1.0% QoQ expected
Switzerland, CPI data for May
- Headline (annual): 1.4% YoY vs 1.4% YoY expected (1.4% YoY previously)
- Headline (monthly): 0.3% MoM vs 0.4% MoM expected (0.3% MoM previously)
- Core (annual): 1.2% YoY vs 1.2% YoY previously
Taking a look at AUDCHF chart at H4 interval, we can see that the pair managed to drop below the support zone marked with 200-period moving average (purple line), previous price reactions and 23.6% retracement of recent upward impulse. In theory, this paves way for a deeper drop. However, traders should keep in mind that it does not necessarily mean the trend has changed to downward. According to the Overbalance methodology, a trend reversal would require drop below the range of the largest correction in the current impulse, which can be found near 50% retracement in the 0.5850 area.
Source: xStation5
