- AUD/USD breaks below 0.6700 after consecutive softening of Australian CPI.
- Weak retail demand weighed heavily on inflation in Australia.
- The 20-period EMA at 0.6686 is acting as a cushion for the Australian dollar.
The AUD/USD pair has broken below the round level resistance at 0.6700 in the Asian session, indicating a tumultuous move. Australian assets went rangebound after falling vertically after the Australian Consumer Price Index (CPI) softened.
Australia’s Monthly Inflation Rate (Fed) fell further to 6.9% from the previous report of 7.4% as household spending was cut dramatically. Households are suffering from a ballooning burden of goods and services along with nominal income growth. This reinforced the Reserve Bank of Australia’s (RBA’s) intentions to suspend tightening policy from his April meeting.
Meanwhile, the US Dollar Index (DXY) shows a stronger recovery from 102.40. The recovery move by the USD index escalated to 102.60.
On a two-hour scale, AUD/USD showed a sizeable gain after sensing strength near the upward sloping trendline in a symmetrical triangle chart pattern positioned from the March 10th low of 0.6564. The downtrend line in the chart pattern is plotted from the March 1 high of 0.6784.
A 20-period exponential moving average (EMA) at 0.6686 is acting as a cushion for the Australian dollar.
In addition, the Australian dollar maintains a bullish grip as the Relative Strength Index (RSI) (14) struggles to stay within the bullish range of 60.00 to 80.00.
If the asset breaks out of the March 13 high of 0.6717, the Australian bulls will push the asset further towards the March 7 high of 0.67478, followed by the February 23 low of 0.6781. Followed by horizontal resistance plotted from .
Conversely, a break below the March 15th low of 0.6564 will drag the asset towards the October 4th high of 0.6547 and the round level support of 0.6500.
