https://jamesthatchersnewstradinganalysis.quora.com/Australia-CPI-q-q-April-28-2021
What does the data mean to the market?
The Consumer Price Index (CPI) measures the change in the price of goods and services from the consumer's perspective. It is a key way to measure changes in purchasing trends and inflation. The impact on the currency may go both ways. A rise in CPI may lead to a rise in interest rates and a rise in local currency. On the other hand, during the recession, a rise in CPI may lead to a deepened recession and a fall in local currency.
The RBA has a dual mandate of reduced unemployment and achieving higher inflation, So we hope a surprise increase in the CPI figures could fuel a new debate for the RBA on when it would begin tapering.
Historic deviations and their outcome
January 27 2021 Headline Q/Q and Y/Y gave +0.2. Trimmed Mean was flat, though so not ideal. The move was respectable, lasting a good 30 seconds!
See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=28145;t=2021-1-27%200:30:00.0;s=AUDUSD;r=S10
July 29 2020 Trimmed mean gave a -0.2 dev but conflicted with a positive +0.1 from Headline. Nevertheless, Trimmed Mean won the day and blew away the conflict.
See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=20676;t=2020-7-29%201:30:00.0;s=AUDUSD;r=S10
I will use forecasts of:
CPI - Trimmed Mean (Q/Q) 0.9
CPI - Trimmed Mean (Y/Y) 1.4
CPI (Q/Q) 0.5
CPI (Y/Y) 1.2
Today's trade plan
We need the Trimmed Mean QQ and/or YY to deviate by +-0.3 with no conflicts from the Headline QQ and YY. If this happens, we should see a prolonged move that we can benefit from. Any AUD pair will move from this data.
Tradable pairs
AUDJPY
AUDUSD
EURAUD
GBPAUD
Hope this helps but please do your own analysis!!
Good luck!!
James Thatcher
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.