The Australian Dollar (AUD) rallied against the US Dollar (USD) on Wednesday, increasing the price of AUDUSD to more than 0.7700 following the release of some high profile economic reports. The technical bias remains bullish in the short term because of a Higher High in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded near 0.7685. The pair is expected to face a hurdle near 0.7734, the swing high of the last major upside rally ahead of 0.7755, the high of 2016 as demonstrated in the given below daily chart.
On the downside, a support can be seen around 0.7580, the trendline support ahead of 0.7500, the confluence of psychological number, horizontal support and swing high of the recent downside move as demonstrated in the above chart. A break and daily closing below the 0.7500 zone shall increase selling pressure, validating a move towards the 0.7350 level in near future.
Consumer Price Index
Australia’s September quarter consumer price inflation (CPI) report has just been released, and it’s come in hotter-than-expected. Headline CPI rose by 0.7% for the quarter, leaving the year-on-year increase at 1.3%. The figure beat expectations for an increase of 0.5% and was higher than the 0.4% level reported in the June quarter. Economists were looking for a gain of 0.4% for the quarter, and 1.55% increase year-on-year.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair can be a good strategy if we get a better a valid bearish reversal candle on the daily chart.
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