Looking at price action on AUDUSD following CPI reports
Inflation is one of the key factors in FED's decisions. It is expected to move the market every time it gets released, especially now that FED is watching.
Previous CPI was on 13/10 - 0.6% against 0.4% forecasted.
There wasn't any directional move on that day, just liquidity sweep on both sides.
Before that, another report came out on 13/09 - 0.6% against 0.3% forecasted.
Price broke out previous session's high before the event and dropped massively with its announcement. So far, this is a never-look-back level.
On 10/08, there was second of only two reports this year that turned out with negative surprise - 0.3% against 0.5% forecasted.
There isn't any immediate low or high breach worth mentioning, the price just rocketed through everything in close vicinity. However, as I marked with Yellow line, there was a significant swing high in 60 days period that was breached only for price to return below it and never look back after. I am adding daily chart below with all of the reports.
From the daily chart, we may conclude that CPI report has a tendency to create Monthly or even multi-month Lows and Highs. Just in the latest 60 day window, the highest price was September's CPI, the lowest price in that window is October's CPI. With the exception of June, the reports always created a significant High or Low or were or were only one day away from it.
Most CPI candles also exert visibly above-average movement and like to take on liquidity in close proximity to the price.
A negative surprise (inflation lower than expected) would likely lead above 0.655, perhaps up to 0.66, but is unlikely to change the trend. This would, therefore, be another highest high for months to come.
A positive surprise could quicklu steer the price below 0.625. I don't think it will go back up on positive surprise, it looks like that would high resistance run, because the price has provably tried to go there and failed on Wednesday's London session. It dropped instead and following New York session made another attempt, yet did not even beat London session there.
Legend:
Lines:
Violet - Monthly Highs and Lows
Dark blue - Weekly Highs and Lows
Cyan semi-transparent - Daily Highs and Lows
Cyan dashed semi-transparent - New York Midnight
Yellow semi-transparent thick - estimated liquidity area
Other:
Purple channel - Single Print, price went either down or up without any overlaps on higher timeframe charts
Yellow, blue, ted rectangles - key forex sessions, first three hours
There wasn't any directional move on that day, just liquidity sweep on both sides.
Price broke out previous session's high before the event and dropped massively with its announcement. So far, this is a never-look-back level.
There isn't any immediate low or high breach worth mentioning, the price just rocketed through everything in close vicinity. However, as I marked with Yellow line, there was a significant swing high in 60 days period that was breached only for price to return below it and never look back after. I am adding daily chart below with all of the reports.
From the daily chart, we may conclude that CPI report has a tendency to create Monthly or even multi-month Lows and Highs. Just in the latest 60 day window, the highest price was September's CPI, the lowest price in that window is October's CPI. With the exception of June, the reports always created a significant High or Low or were or were only one day away from it.
Most CPI candles also exert visibly above-average movement and like to take on liquidity in close proximity to the price.
A negative surprise (inflation lower than expected) would likely lead above 0.655, perhaps up to 0.66, but is unlikely to change the trend. This would, therefore, be another highest high for months to come.
A positive surprise could quicklu steer the price below 0.625. I don't think it will go back up on positive surprise, it looks like that would high resistance run, because the price has provably tried to go there and failed on Wednesday's London session. It dropped instead and following New York session made another attempt, yet did not even beat London session there.
Legend:
Lines:
Violet - Monthly Highs and Lows
Dark blue - Weekly Highs and Lows
Cyan semi-transparent - Daily Highs and Lows
Cyan dashed semi-transparent - New York Midnight
Yellow semi-transparent thick - estimated liquidity area
Other:
Purple channel - Single Print, price went either down or up without any overlaps on higher timeframe charts
Yellow, blue, ted rectangles - key forex sessions, first three hours