AUD/USD analysis: above 0.7400 ahead of key Australian inflation data

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7411

Australian Q2 inflation expected at 2.2% from Q1 1.9% YoY.
RBA trimmed CPI seen unchanged from the first three months of the year.

The AUD/USD pair regained the 0.7400 level and settled a few pips above it, benefited from Chinese political headlines that underpinned equities and base metals. China's State Council announced a set of stimulus measures to boost local consumption and let the Yuan devaluate to a 13-month low against the greenback. And while authorities deny a currency manipulation, is clear that a cheaper country benefits exports. Australian quarterly CPI will be out during the upcoming Asian session, expected to have advanced 0.5% in Q2, leaving the yearly increase at 2.2%, up from 1.9% in the year to March. A pickup in inflation could put a rate hike closer in time, moreover after the latest solid employment report, therefore triggering some Aussie demand. At the time being, the pair continues trading within familiar levels, and short-term neutral according to technical readings in the 4 hours chart. In the mentioned time frame, the pair briefly slipped below its moving averages to settle again between the 100 and 200 SMA, with the larger ones capping advances. Technical indicators have turned lower within positive levels, with the Momentum pressuring its mid-line and the RSI currently at 54, failing to provide clear directional clues.

Support levels: 0.7370 0.7330 0.7300

Resistance levels: 0.7445 0.7490 0.7520

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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