AUD/USD analysis: Aussie remains strong, despite risk sentiment

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7475

The AUD/USD pair closed the day in the red for the first time in over a week, not far from a daily low of 0.7457. Broad dollar's demand was behind the pair's decline, although it was partially limited by a solid uptick in inflation, as measured by the Melbourne Institute. According to the report, inflation grew by 0.5% in December, up from 0.1% in the previous month, while the YoY reading came in at 1.8% from previous 1.5%. Australia has some minor reports scheduled for the upcoming session, which include new motor vehicles sales and home loans. Technically, the fact that the pair has bounced from the 0.7450, a major static support, suggests that the downward potential is limited and that the market is taking retracements as buying opportunities. In the 4 hours chart, the price is a handful of pips below a strongly bullish 20 SMA, whilst technical indicators turned flat, the Momentum around its 100 level and the RSI at 59, indicating that selling interest is limited. Anyway, the pair needs to advance now beyond 0.7524, December's monthly high, to confirm another leg higher that can extend up to the 0.7700 region during the following sessions.

Support levels: 0.7450 0.7410 0.7370

Resistance levels: 0.7495 0.7525 0.7560

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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