AUD/USD remains close to 0.7100 support-line ahead of Australia inflation data

Bulls preferred greenback over other G10 currencies amid broad fundamental strength of the US economy.
Aussie inflation data will be in the spotlight.

Anil Panchal FXStreet

AUD/USD is taking the rounds of 0.7100 during the early Asian session on Wednesday. The pair slipped beneath seven-week-old support to the lowest in 20 days on Tuesday but couldn’t offer a D1 close under the support-line and is still seesaws close to the rest-point. Coming up in the investor's radar will be first quarter inflation data from Australia.

While the US Dollar (USD) was strongly in demand due to overall risk-off on the back of upbeat US new home sales and welcome equity performance, the Aussie was suppressed on expectations of a fewer monetary boost from its largest consumer, China.

Global traders focused on the pre-Easter strength of the US fundamentals and fewer political tensions concerning the world’s largest economy while preferring the greenback over other G10 currencies.

Macro risk barometer, the US 10-year treasury yield, was down 2 basis points to 2.57% by the end of Tuesday’s trading.

Headline consumer price index (CPI) and RBA’s trimmed mean CPI for Q1 2019 will bear market attention during the Asian session. The CPI is likely being on a back-foot with expectations favoring +0.2% and 1.5% marks versus +0.5% and 1.8% respective priors on QoQ and yearly basis. Further, the trimmed mean CPI might remain unchanged at 0.4% on a quarterly basis but could slip to .7% from 1.8% on a YoY format.

AUD/USD Technical Analysis

Sustained break of 0.7100-0.7095 support-zone becomes pre-requisite for the Aussie to aim for 0.7050, 0.7030 and March month lows near 0.7000.

Meanwhile, 50-day simple moving average (SMA) level of 0.7115, followed by 100-day SMA level of 0.7135, can entertain short-term buyers during a pullback ahead of challenging them with 200-day SMA level near 0.7185/90.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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