Australian dollar clings on to its life.
“Australia’s CPI rose significantly in the first quarter.”
The Australian dollar managed to recover from the downside on yesterday due to the release of regional economic data which sparks fresh demand. Australia Bureau of Statistics reported that Consumer Price Index for first quarter rose 2.1%, its fastest pace in two decades. The data sparked speculation that Reserve Bank of Australia may hike their interest rate during next week policy meeting. Nonetheless, overall sentiment in the market is still skewed towards the US dollar after Federal Reserve signalled to start a more aggressive rate hike moving forward. Fed will most likely hike interest rates by 50 basis points next week and keeping the same pace for future meetings if inflation still is sticky.
Quick recap on AUDUSD
AUDUSD slumped sharply after forming a double top pattern with strong resistance at 0.7524.
AUDUSD Weekly Technical Analysis
The pair continues to test near 0.7112 due to strong buying from the downside, clear from its recent candlestick shadow.
AUDUSD Daily Technical Analysis
Recent price action from the daily chart suggests the pair might enter short consolidation phase until bears picks up their momentum thereafter.
Order: SELL STOP
STOP LOSS: 0.7158
Target 1: 0.6982
Target 2: 0.6840
ZFX Analyst’s Comment
In the short-term, AUDUSD is likely to undergo consolidation or short bullish retracement due to substantial buying momentum from the downside. Nonetheless, as the market remained fixated upon Fed’s aggressive stance, US dollar may extend its bullish reign in the long-term, sapping out demand for other currencies.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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