Stagnant Australia Wage Price Index (WPI) to Fuel AUD/USD Weakness

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

4Q

2017

02/20/2018 00:30:00 GMT

2.0%

2.1%

-11

-81

4Q 2017Australia Wage Price Index (WPI)

AUD/USD 15-Minute Chart

Australia’s Wage Price Index (WPI) unexpectedly increased for the second consecutive quarter, with the headline reading climbing to an annualized 2.1% from 2.0% in the three-months through September.

The development was overshadowed by a 19.4% decline in construction work done, which marked the biggest decline since the recordkeeping began in 1986. The Australian dollar struggled to hold its ground following the mixed data prints, with AUD/USD grinding lower throughout the day to close at 0.7804.

AUD/USD Daily Chart

  • The rebound in AUD/USD appears to have fizzled ahead of the 0.7590 (100% expansion) region as it snaps the recent series of higher highs & lows, with the Relative Strength Index (RSI) highlighting a similar dynamic as the oscillator flops ahead of trendline resistance.
  • A fresh bearish sequence has started to take shape, with a break of the monthly-low (0.7412) bringing the 0.7340 (61.8% retracement) area back on the radar, which largely lines up with the 2017-low (0.7329).

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— Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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