The Australian Dollar (AUD) nosedived against the US Dollar (USD) on Wednesday, dragging the price of AUDUSD to less than 0.7550 amid some key economic events. The technical bias shall remain bullish because of a higher high in the ongoing upside rally.

Technical Analysis

As of this writing the pair is being trade around 0.7533. A hurdle can be noted near 0.7566, the trendline resistance area ahead of 0.7600, the psychological number and then 0.7726, the swing high of the last major upside rally as demonstrated in the give below daily chart.

On the downside, a support can be noted around 0.7493, a short term horizontal support ahead of 0.7468, the confluence of 50% fib level as well as horizontal support area and then 0.7387, the trendline support area followed by 0.7159, the swing low of the last major down side move.. The technical bias shall remain bearish as long as long as the 0.7159 support area is intact.

Australia’s Inflation

A slightly lower-than-expected inflation figure has given the Reserve Bank scope to keep interest rates lower for longer. The Bureau of Statistics headline Consumer Price Index (CPI) rose a moderate 0.5 per cent in the December quarter, down from 0.7 per cent in the three months to the end of September. That puts annual inflation at just 1.5 per cent, well below the Reserve Bank’s targeted 2-3 per cent level. The bank’s preferred measures of core inflation – which strip out the most volatile price moves – were both at 0.4 per cent for the quarter, and also around 1.5-1.6 per cent for the year.

Trade Idea

Considering the overall technical and fundamental outlook selling the pair around current levels appears to be a good strategy in short to medium term.