• AUD/USD traded in narrow range on Thursday as investors stayed cautious ahead of key U.S. inflation data that could influence expectations for the Federal Reserve’s next policy move.
•The main focus is on the U.S. August Producer Price Index (PPI), due later Thursday, with economists expecting producer prices to rise 0.4% month-on-month.
•Attention will then shift to the August Consumer Price Index (CPI) on Friday, which is forecast to increase 0.4% from the previous month and 3.4% year-on-year.
•Markets are currently pricing around a 60% probability that the Federal Open Market Committee will raise the federal funds rate by 25 basis points at its September 16 meeting..
• Geopolitical risks are also keeping markets cautious as United States and Iran have carried out their biggest wave of attacks on shipping since the beginning of the war, raising concerns over further disruptions to energy supplies through key Middle Eastern shipping routes.
• Immediate resistance is located at 0.7237(Daily high), any close above will push the pair towards 0.7270(23.6%fib).
• Support is seen at 0.7166(38.2%fib) and break below could take the pair towards 0.7125 (Sep 2nd low ).
Recommendation: Good to buy around 0.7210, with stop loss of 0.7160 and target price of 0.7280
