The local currency will be in focus today as traders weigh CPI and China data. Local inflation data is due out at 11.30am and the market is expecting a bumper reading. CPI is expected to show a 0.8% q/q rise, which translates to a 3.2% y/y rise. However, the figure the RBA actually looks at is the trimmed mean which is expected to come in at 2.9%. The previous reading was 2.6% and therefore if this materialises, it could be interesting to see how this feeds through to the RBA given 3% is the top-end of its target range. At the same time, traders will have to weigh the impact of the HSBC flash manufacturing PMI reading due out at 11.45am. The market is looking for a slight improvement to 48.4 from 48.1. AUD/USD is currently sidelined at 0.936 and we are likely to see tight ranges maintained heading into the data. To the upside, 0.94 will be a key barrier while to the downside 0.93 has been presenting a floor.
The precious metal remains choppy as traders take a wait and see approach on the Ukraine situation. Gold remains below 1300 but managed to bounce significantly off its overnight low of 1276. The latest on the Ukraine front is that the US is sending troops to Eastern Europe for training and Joe Biden is considering further sanctions on Russia. These headlines could see gold buying resume in the near term and perhaps have another crack at 1300.
The stock continues to see good buying momentum since breaking through the $40 barrier. The bullish move is likely to see traders look to add longs and WPL could be gearing up for a move to $45, which is where the next resistance level is. A good strategy for traders who are already long is to trail stops, with $40 likely to turn into support in the near term.
The miner has its 3Q output report today and the recent volatility in gold prices will remain a concern for its share price. NCM has had a tough run with production in recent times and should today’s report disappoint then the uptrend support which has been in place since October 2013 might finally be broken. The support comes in at $10 and this will be the key level to watch today.