AUD/USD jumps toward 0.7270 as the US dollar tumbles
- A general slide of the dollar boosts AUD/USD to the upside.
- Pair faces next resistance around 0.7275.
- US inflation rises to 7%, largest increase in nearly 40 years.
The US dollar is falling sharply amid higher equity prices and following the US CPI December report. The AUD/USD jumped to 0.7266 during the American session, reaching the highest level in a week. It remains around the top, with the bullish momentum intact.
The decline of the dollar and a rally in commodity prices are boosting AUD/USD. The DXY is falling by 0.40%, at 95.20, the lowest since November 15. The annual inflation rate in the US reached at 7%, the highest since 1982. The number did not boost US yields which printed fresh lows and weighed on the dollar.
AUD/USD likely to test recent tops
The pair is approaching the 0.7275/80 zone that capped the upside late in December and early January. A break higher would strengthen the positive outlook for the aussie. The next level to watch is the 100-day simple moving average at 0.7285.
If AUD/USD fails to break the mentioned resistance, a retreat toward the 20-day moving average at 0.7200 seems likely.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
