Technical Bias: Bullish
Key Takeaways:
- AUDUSD rallies as CPI meets expectations
- Bias remains bullish
- 0.7681 is key support area in short term
The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Wednesday, increasing the price of AUDUSD to more than 0.7750 following the Consumer Price Index (CPI) news. The technical bias remains bullish due to a Higher High (HH) on daily chart.
Technical Analysis
As of this writing, the pair is being traded near 0.7760. A support can be seen near 0.7750, the psychological number ahead of 0.7681, the low of recent dip as demonstrated in the following chart. A break and daily closing below the 0.7681 support area could spur renewed selling pressure, validating a move below the 0.7600 handle.
On the upside, the pair is expected to face a hurdle near 0.7781, the 61.8% fib level ahead of 0.7840, the 76.4% fib level and then 0.7935, the high of last major rally. The technical bias will remain bullish as long as the 0.7551 support area is intact.
Australia Consumer Price Index
The Consumer Price Index (CPI) in Australia remained 1.3% during first quarter as compared to 1.7% in the same quarter of the year before, a government report revealed today meeting the average forecast of 1.3%. Generally speaking, higher CPI reading is considered positive for the economy and vice versa.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing below the 0.7650 support area.
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