The Australian dollar showed a decline in Asian session trading this morning following the market reaction to the published Australian inflation data.
Falling short of expectations, the Australian consumer price index for the first quarter of 2021 was published lower at 0.6% compared to expectations to remain at 0.9%.
The data that is the focus of the central bank will certainly influence the decision of the Reserve Bank of Australia (RBA) in setting policy at its latest meeting.
The price movement on the AUD/USD pair chart which moved slowly during the Asian session around 0.77700 has made a decline of around 40 pips following the published inflation data.
The decline has actually started to be seen since yesterday’s trading after the price movement at the beginning of the week was seen making a rise testing the resistance of 0.78100 and still has not been successfully broken like last week’s movement pattern.
But the movement of the US dollar is also seen as limited to provide a clearer direction as investors are cautious ahead of the FOMC meeting early Thursday morning.
If the price on the AUD/USD chart continues to fall lower, last week’s support level at 0.77000 will be tested before the price heads to the RBS (resistance become support) zone of 0.76500.
The continued lower decline could hit back to the 0.75300 support zone that had supported the previous price increase on the decline at the end of last March.
If the Aussie dollar manages to outperform the US dollar, the price may make a rebound to test the resistance zone 0.78100-0.78300.
A higher rise beyond the zone will record the latest 9 -week high likely heading to the level around 0.79000.
