Audusd Shows Consolidation

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Audusd Shows Consolidation

Aud/Usd Shows Consolidation At 0.6750

AUD/USD is trading sideways as Tuesday's session unfolds and appears to be in limbo ahead of Powell's testimony. Right now, the AUD/USD pair is sitting at 6-month highs, which shows that the greenback is really struggling against the G10 currencies.

Once the Fed's Powell testimony is released, the volatility will once again return to the AUD/USD pair. There's a high chance that Powell will adopt a dovish stance, but there's also a slim chance that he reiterates a hawkish stance.

Disinflation Continues In Usa

Last week, Powell talked about how they have made progress in regard to disinflation but also reiterated the need for solid data to confirm it. Now, investors are of the view that Powell will confirm it and show a plan on how to lower the rates.

To get more clarity on the US inflation, the upcoming CPI, which is due on Thursday, will be closely watched. According to the forecasts of the economists, the core inflation will be around 3.4% yearly and near 0.2% on a monthly basis.

Meanwhile, the sentiment is heavily tilted towards the September's rate cut by the US Federal Reserve. This is the main reason why most of the US indices, including the S&P 500 futures, have also registered some solid gains.

The DXY, which measures the USD performance, is also seen near 105.00. It seems that even the DXY is waiting for Powell and CPI to find its next direction.

On the Australian side, the RBA is expected to go with a hawkish stance and even announce more rate hikes as the disinflation process has stalled. During the month of May, CPI (Monthly) jumped by 4% which was not in line with the central bank's acceptable limits.

Another important data release for the AUD/USD is China's CPI, which is also due tomorrow. As China is one of the top trading partner of Australia, any major change in the China's CPI can also influence the Australian economy and AUD.

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