Global macro overview for 27/01/2016:
Data on the Consumer Price Index was delivered from Australia overnight posting better-than-expected readings. Market participant had anticipated a slight drop in the present quarter to the level of 0.3% from 0.5% in the last quarter, but according to the Australian Bureau of Statistics, consumer prices climbed 0.4% from the third quarter and 1.7% from a year earlier. This data suggests that any prospects of the interest rate cut have been ruined. The main reason for that conclusion is quite simple: Australia is a commodity-reliant economy, strongly dependent on the crude oil industry, and China is their key trading partner. The recent turmoil in the Chinese stock market and stubbornly dropping crude prices are making more downward pressure.
Now let's analyze the technical side of the AUD/USD pair in the H4 time frame: a bounce from the technical support level of 0.6918 has lead to more gains in this pair and it looks like bulls are trying to break above the important technical resistance at the level of 0.7047. If this and next resistance at the level of 0.7074 is violated with a daily candle close above it, the recent downtrend might be over and AUD/USD will advance even more.
