Forex: AUD/USD trading in narrow range, CPI due out later in week

FXstreet.com (Barcelona) - The Aussie is trading in a narrow range during the current Asia session. A number of economic reports which may have influence on the pair will be released later this week including China PMI, Aussie CPI, and US GDP.

According to Gregory McKenna of Global FX, “As noted last week the Aussie was vulnerable given the heavy longs in the market while gold was falling. The fall in net big spec longs of 24k roughly helps explain why the Aussie was consistently unable to sustain any strength in the last week.” He went on to add “Aussie net longs are around about mid range for the past 6 months but a break of 1.0250 would certainly get some further liquidation happening and any move below 1.02 will likely bring in the sellers heavily. The Aussie is vulnerable based on positioning this week so watch the CPI.”

The FXStreet.com Trend Index remains in slightly bearish set up on the daily chart, while the OB/OS Index is Oversold. First resistance sits at 1.0305 (previous support, now resistance on daily chart), followed by 1.0356 (the 45 dma). Initial support sits at 1.0240, followed by 1.0140 (key support pivot on weekly chart). A move below 1.0140 would be a key break of the recent trading range and points to eventual targets as low as 0.9650.