I don’t want to get caught up in guessing what the CPI number might be, of course its important and will have an effect on next month’s RBA decision but to be honest the market will have forgotten it by this time tomorrow. What I did find very interesting yesterday was that macro funds were selling AUD/CAD again, so whilst positioning was being reduced for some weeks obviously there is still plenty of scope for AUD bearishness. Perhaps they are like me; I’m short and bearish overall but I have only got a relatively small position and was hoping for better opportunities to sell at. The overall professional market could be the same; a bit short but keen to sell more? If that’s the case, then the bearish sentiment could return and we could start seeing the market gap lower as bears start chasing?
It’s probably unlikely that we see any big moves today but I prefer the sell-rally strategy, with initial resistance at the previous pivot near 1.0310/20. Corporate bids are reported near 1.0230 and they will slow down initial sell-offs.