AUD: AUDUSD Range Trading, Jobs Data & RBA’s Hauser Coming Up

• JPMorgan see headline CPI accelerating to 2.1% Y/Y in December, helped by "an unusually modest decline in December prices at the pump and stability in energy prices overall."
• They project core CPI (CPIxFE) increased a tenth to 2.0% Y/Y in December, its first increase since September but keeping a downward trajectory “relatively intact”.
• “Goods inflation moved sideways in November and looks to have stabilized after a few months of negative growth in the year-ago rate, while services prices are gradually cooling but remain elevated.”
• “Growth in shelter prices dipped below 5.5%oya in November for the first time since mid-2022, but is still driving the stickiness in overall services price gains.”
• “We expect mortgage interest costs to moderate further following 50bp cuts at each of the last two BoC meetings and 175bp overall since last June.”

• RES 4: 1.4671 2.0% 10-dma envelope
• RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
• RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
• RES 1: 1.4486 Intraday high  
• PRICE: 1.4323 @ 16:50 GMT Jan 20 
• SUP 1: 1.4262 Low Jan 20
• SUP 2: 1.4226 50-day EMA
• SUP 3: 1.4120 Low Dec 11 
• SUP 4: 1.4011 Low Dec 5

A sharp sell-off in USDCAD Monday resulted in a print below support at 1.4280, the 20-day EMA. Pice has also traded through the 20-day EMA, at 1.4364. The reversal has exposed the next key support at 1.4226, the 50-day EMA. A clear breach of the 50-day EMA would undermine the recent bullish theme and signal scope for a deeper retracement. Key resistance and the bull trigger has been defined at 1.4486, Monday’s intraday high.   

• Goldman Sachs highlight four key elements to watch in the December CPI report:
• i) “our forecast assumes a 34bp drag on headline inflation from the start of the GST/HST tax holiday in mid-December, but we acknowledge significant uncertainty around how the cumulative 70bp tax holiday drag will be distributed across the December and January inflation releases.”
• ii) “we expect a spike in energy inflation, but soft food inflation due to the sales tax holiday on several food items such as restaurant meals.”
• iii) “we forecast an uptick in homeowners’ replacement cost inflation—reflecting higher new house prices—and a slight moderation in rent prices, as asking prices declined for the third consecutive month.”
• iv) “we expect mortgage interest cost inflation will continue to moderate following rate cuts.”