Australia's inflation stats came in mega spicy, surprising everyone. 📈 The headline annual CPI just yoinked its way up to 3.2%, ducking outta the RBA's chill 2-3% comfort zone. 😱

So, how did the Aussie dollary-doo respond? And which setups from our watchlist were flexin' their muscles with the best trade ops? 🤔

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We're digging into how our AUD schemes fared this week after that spicy Aussie CPI dropped while everyone else was sweating trade goss.

The Setup

What We Were Watching: Australian Consumer Price Index (Q3 2025)

• Expectation: CPI taking a hop, skip, and jump from 0.7% to 1.0% q/q or 2.1% to 2.9% y/y in September
• Data outcome: CPI didn't just walk – it ran to 1.3% q/q or 3.2% y/y, ditchin' the RBA’s safe space of expectations
• Market vibes during the event: Mixed feels with risk ties, as assets played the trade hope card before the Trump-Xi meet, U.S. tech zzzzam, central bank mood swings, and geopolitical spookiness with Israel

Event Outcome

Australia’s CPI yeeted up to 3.2% year-over-year in Q3 2025, reaching a clout level like never before this year and surprising the RBA by hopping out of their goal zone since Q2 2024.

Main Vibez:

• Headline CPI skyrocketed 3.2% this quarter – way beyond the 3.0% guess-timate and an upgrade from Q2’s 2.1%
• Quarterly inflation bobbed to 1.3%, blessed mostly by housing (+2.5%), good times and culture (+1.9%), and getting places (+1.2%)
• Trimmed mean inflation hopped to 3.0% annually, upgrading from 2.7% in Q2 – the first sparkle since Christmas 2022

Biggest jumps were seen in housing, vibes & culture, and travel. Plus, property charges just dropped their biggest bomb since 2014, soaring 6.3% as locals tried to figure out the rates.

Hot Tip Engaged: Go long on AUD setups!

Broad Market and Exogenous Drivers:

Trade Hope Vibes and Risk-On Blitz (Monday-Tuesday): Markets were buzzin' as weekend tea spilled about a U.S.-China diplomatic vibe check before the Trump-Xi showdown. The thought of trade drama chillin' sparked a massive risk-on party, sending stocks to the moon while the gold went snooze mode under $4,000. Meanwhile, the U.S. government shutdown kept everyone on edge, starved for key finance info.

Central Bank Shockwaves and Powell’s Hawk Dance (Wednesday): The Fed dropped a 25 bips cut bomb – not shocking anyone – but Powell’s mic-drop about December cuts not being a “done deal” woke everyone up, boosting the dollar and 10-year yields to 4.10%. Canada's bank was also snip snip snippin’ rates but suggested they might be done with the cutting party, and Australia’s CPI boom meant November RBA cuts were probably canceled.

Trade Thaw and Banks' Surprises (Thursday-Friday): President Trump bragged that his chit-chat with Xi was “all kinds of magical” with a tax ceasefire momentarily cooling off the drama. Forex chaos stayed high-key as BOJ toned down their hawkish vibes, looking for more tea before getting strict. Meanwhile, the ECB was keeping rates steady but side-eyeing external market and political spanners that could shake their plans.

Scenario: How Did It Go Down?

AUD/NZD: Bullish News + Risk-Off Scene

= Pretty good odds of being a win

AUD/NZD 1-Hour Forex Chart by TradingView

This setup was pro long vibes and most likely slayed all week long. After our first chitchat about this, the AUD/NZD smashed through its October trend line just before CPI pours in, chilling near the psychological 1.1400 mark and the R2 Pivot Point at 1.1394. 💥

The hotter-than-expected CPI numbers instantly backed the long AUD bias, with AUD/NZD smashing past R2 pronto. After a cheeky pullback, the pair gave R2 Pivot Point resistance-now-support a cheeky revisit before hitting fresh highs, feeling the Aussie love over the Kiwi. 🥝

The bull run before the week tapped out was likely sparked by a major gap between the two currencies. Australia’s spicy CPI kept the RBA side-eyeing rate cuts, while New Zealand’s wobbly data, like the ANZ Roy Morgan confidence swag dropping to 92.4, kept the Kiwi under pressure. 🦘 Even with Powell’s confident FOMC chat shaking the risk feels halfway through the week, the pair stood firm on key support before zooming upwards again.

Trade management vibes and individual decision-making would’ve probably influenced a trade’s outcome, but as AUD/NZD closed up for the week, above discussion and post-CPI prices, it’s highly likely to have backed a positive outcome for most strategies. 🔥

Not Eligible to leave Watchlist – Bearish AUD Setups and AUD/USD

AUD/USD: Bullish AUD Event Outcome + Risk-On Vibes

AUD/USD 1-Hour Forex Chart by TradingView

AUD/USD got a hot start, breaking through the .6525 triangle resistance pre-CPI hype. The soaring inflation print sent Aussie rocketing, owning the GBP and NZD. 💪

But then Powell’s hawkish chat midweek threw a USD wrench in the works, pushing the greenback up and snuffing out our AUD/USD long vibe conviction.

FOMC event put AUD/USD back in sale mode, erasing much of its post-CPI boom. Anyone staying bullish on AUD/USD ignored USD news and probably saw a downer week, regardless of trading style/strategy.

AUD/CAD: Bearish Event Vibes + Risk-On World

AUD/CAD 1-Hour Forex Chart by TradingView

The target event crushed bearish AUD tunes, as Aussie CPI popped unexpected and beyond RBA’s target. The hot data and pre-event bullish feels nixxed AUD/CAD talk past watchlist.

Post-CPI, the Loonie made a comeback with oil prices rallying from Russian geopolitics and new U.S. sanctions. Alongside less chill BOC speak midweek, this likely sent AUD/CAD into a chill and consolidation space, as both bulls clashed all week. 🛢️

EUR/AUD: Bearish Outcome + Risk-Off Vibe

EUR/AUD 1-Hour Forex Chart by TradingView

This setup bet on weaker Aussie vibes to hype EUR/AUD but got shut down with the heat of CPI, squashing the thesis instantly.

While safe-havens like EUR got a moment in the sun when Powell stepped in midweek, strong Aussie vibes crushed it with confidence, mixing up the flows. EUR/AUD stayed pressed all week as surprises kept the table clear of RBA rate cuts while euro stumbled slightly as USD found growth the week’s latter half.

The Verdict

Australia’s inflation pop pumped bullish AUD bets hard, with AUD/NZD going beyond the watchlist into live-risk goals. The spicy CPI numbers bumped inflation to 3.2% y/y, making a helluva case for the RBA to ease up on rate cutting. 🔥

The AUD/NZD chase was likely the MVP, as CPI hype immediately reaffirmed long tones, drawing fundamental bulls, especially after a retest of broken resistance levels. The spotlight on sticky Aussie inflation vs soggy Kiwi data created a story too good to ignore, even as market mood went emo midweek. 📈

Overall, we’re rating our watchlist chats as “hella likely” to back a positive run since the bullish AUD bias plus a dash of risk-off flavor around the main event had AUD/NZD leveraging those fire CPI numbers. 🚀

Main Souvenirs:

Fundies Win Over Risk Mood

Application: When playing event-driven crosses, bank on major fundie diffs. Stronger macro vibes stick around; mood-driven pairs might not.

Prep Timing for Big Events

CPI dropped right before big bank speeches and trade drama, making it a week full of thrill that needed tight control.

Application: When things are jam-packed event-wise, set your exits and lighten risks ahead. Active play between hot drops is the line between win and drag.

Techs + Fundies Power Up Confidence

AUD/NZD was already breaking trends pre-CPI, confirming the play was legit.

Application: Prioritize play where techs and fundies gel. If price is backing your bias before a drop, momentum likely stays in your corner, boosting risk-reward.