The price on the AUD/USD currency pair chart plunged up to 130 pips!
The bearish situation is expected to continue until next week's trading after investors predicted a further strengthening of the US dollar following the publication of strong US inflation data to a 40 -year high.
Examining the price movement on the AUD/USD chart yesterday, the price has reacted early to the publication of US inflation data where the initial strengthening of the US dollar pushed the price from the 0.72000 high to the 0.71500 level.
But the situation changed later when the shock of a significant depreciation of the US dollar pushed the price high to reach a high of around 0.72500 within a few hours after that.
Not yet abated by the sudden price movement, the price once again reversed to plunge back at the end of the New York session and the decline remained continuous until the Asian and European sessions on Friday.
As of 3pm local time, the price has slipped towards the focus zone at 0.71000 with the strengthening momentum in favor of the US dollar.
Investors will expect the US dollar to re -dominate the market with a surge in inflation giving a clearer picture for the Federal Reserve (Fed) to continue its policy tightening measures.
The decline is expected to cross the 0.71000 level to head up to the 0.70000 level or the 0.69700 support level.
If the price increases, the zone around 0.71800 is seen to be a resistance for the price.
The price increase will also need to pass the Moving Average 50 (MA50) barrier level in the 1 -hour time frame which is also in the zone to signal a change in the bullish trend if it manages to pass.
Higher gains will re -test the price peak reached yesterday before continuing the rise to the focus level around 0.72800 to 0.73000.
