Source: Forex Analysis
AUD/USD has been quite indecisive and volatile after breaking below 0.7150 area with a daily close recently. USD has been the dominant currency in the pair since the recent rate hike. USD is expected to gain further momentum against AUD in the long run though certain AUD pressure may be observed in the coming days.
Today Australia’s MI Inflation Expectations report was published unchanged at 4.0% which did not quite affect the growth of AUD. Reserve Bank of Australia’s Assistant Governor Ellis was quite optimistic in her speech today. Ellis predicts expansion of the Australian economy in both short and long run which altered the market sentiment from bearish to bullish. Moreover, tomorrow Australia’s Home Loans report is going to be published which is expected to decrease to -0.9% from the previous value of 0.4% and RBA Financial Stability Review is going to be presented as well, which expected to porvide the currency with support.
On the other hand, despite mixed NFP data recently, USD managed to sustain its bearish momentum in the meantime. Today US CPI report was published with a decrease to 0.1% which was expected to be unchanged at 0.2% and Core CPI was unchanged at 0.1% which was expected to increase to 0.2%. Additionally, Unemployment Claims also increased to 214k which was expected to be unchanged at 207k.
Meanwhile, ahead of macroeconomic reports from Australia and amid positive recent data, AUD is expected to gain quite strongly over USD despite worse-than-expected readings. Until the US comes up with solid results, AUD is going to extend its strength.
Now let us look at the technical view. The price pushed higher quite impulsively today after an engulfing bearish candle yesterday with a daily close. Though the trend is bearish, the price is expected to rise higher towards 0.7150-0.7200 area before it continues with the bearish momentum to sink deeper in the coming days. As the price remains below 0.7300 area, the bearish bias is expected to continue.
SUPPORT: 0.6850, 0.7000
RESISTANCE: 0.7150, 0.7200, 0.7300
The material has been provided by InstaForex Company – www.instaforex.com