LOOK AHEAD: Friday Data Calendar: SCOTUS Opinion Day, Personal Income, UofM Infl

• RES 4: 0.6872 38.2% retracement of the 2021 - 2025 L/T downtrend  
• RES 3: 0.6858 1.000 proj of the Nov 21 - Dec 10 - 18 price swing
• RES 2: 0.6795 0.764 proj of the Nov 21 - Dec 10 - 18 price swing
• RES 1: 0.6767 High Jan 7 and the bull trigger
• PRICE: 0.6743 @ 16:17 GMT Jan 20
• SUP 1: 0.6664 Low Jan 9
• SUP 2: 0.6642 50-day EMA 
• SUP 3: 0.6593 Low Dec 18 
• SUP 4: 0.6553 Low Dec 3  

Recent weakness off the Jan 14th high in AUDUSD appears to have been a correction. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.6767, the Jan 7 high and bull trigger. A break would resume the uptrend and open 0.6795, a Fibonacci projection. Support to watch lies at 0.6642, the 50-day EMA. A clear breach of the average would suggest potential for a deeper retracement.

Summing up the disinflationary progress beneath the surface in December was MNI's underlying CPI composite (unweighted average of CPI-trim, CPI-median, CPIxFE and CPIX) fell to 2.6% Y/Y from 2.8%, marking a 9-month low and off the Sept/Oct highs of 2.9%.

• At 2.1% on a 3-month moving average, this is the closest the measure has been to 3% since September 2024, with momentum clearly converging on that level.
• A more cautionary note comes from inflation breadth which saw an uptick in the share of the CPI basket growing at 3+% Y/Y to 47% from 42% prior, with 2+% to 57% from 54% (both for the highest since January 2024).
• In turn that was led by goods, with 3+% Y/Y inflation in 47% of the basked vs just 39% prior, again the highest since January 2024. Services actually saw a bit of a diminishment, to 46% 48% prior.
• We attribute much of the sudden increase to the year-before base effect on some groceries though this does take the sheen off the otherwise softer pressures seen in the report.

MNI interviews former Philadelphia Fed President on monetary policy -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com