Baxia Markets
December 13, 2023

Technical Tensions: AUDUSD's Rectangle Pattern in the Crosshairs After USD CPI Data

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In the ever-evolving landscape of forex trading, AUDUSD finds itself entangled in a web of fundamental data and technical patterns. The recent release of USD Consumer Price Index (CPI) Year-over-Year (YoY) meeting forecasts at 3.1%, and USD CPI Month-over-Month (MoM) surpassing expectations at 0.1% versus the forecasted 0.0%, triggered a notable 1.1% decline in AUDUSD from yesterday's high at 0.66121 to a low of 0.65396.


As traders brace for further volatility, the upcoming release of the Price Producing Index (PPI) MoM during the New York trading session takes center stage. Economists anticipate a positive shift in the PPI, forecasting 0.1% improvement compared to the previous -0.5%. A stronger-than-expected PPI reading could intensify the bearish pressure on AUDUSD, setting the stage for potential price adjustments.

Technical Tensions: AUDUSD's Rectangle Pattern in the Crosshairs After USD CPI Data

Technically, AUDUSD is currently in the midst of forming a rectangle pattern, with a defined ceiling at 0.6620 (marked by an orange rectangle) and a floor at 0.65254. The price is positioned below the midpoint of the rectangle and hovers near the lower bounds of the value area, as indicated by the volume profile indicator's pink lines. These factors collectively signal robust bearish sentiment in the market.


A glance at the Exponential Moving Averages (EMA) reveals a bearish trend, with the EMA 50 residing below the EMA 200. The expanding gap between these lines further accentuates the growing bearish momentum. This technical outlook is complemented by oscillator indicators, with both MACD histogram and signal line below the 0 line, and the Relative Strength Index (RSI) below the 60% level. These corroborate the prevailing bearish trend and suggest the potential for further downward movements.


As AUDUSD grapples with fundamental pressures and technical signals, traders should closely monitor the evolving situation. The overall indicators point towards a bearish trend, heightening the likelihood of a break below the rectangle pattern. The unfolding scenarios in both fundamental data releases and technical patterns provide traders with a comprehensive view to navigate the complexities of AUDUSD in the current forex landscape.

Key Economic Releases to Watch Today

USD, PPI (MoM) (Nov)

Forecast 0.1% vs Previous -0.5%

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