Australian consumer price index data for the second quarter published in the Asian session this morning recorded a reading that decreased to 1.8% compared to expectations of 1.9% from the previous reading of 2.1%.
This has invited a negative reaction to the movement of the Australian dollar which showed a decline as soon as the data was published.
However, investors are looking at inflation in Australia which is still at a 21-year high as it is affected by the cost of food and fuel.
Thus, the decline of the Aussie dollar did not last long when it was seen to bounce back on trades connected to the European session this afternoon.
If you look at the price movement on the chart of the AUD/USD currency pair in this morning's Asian session, the price hovering around 0.69500 has dropped around 40 pips when the Australian inflation data was published.
However, not yet touching the concentration level at 0.69000, the price bounced back and displayed a continued horizontal movement in the European session.
There is a signal for a bearish move following a drop below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on today's AUD/USD chart.
It is likely that if the decline continues, the price will try to break the price support zone at 0.69000 before extending the decline lower towards around 0.69300.
A more obvious bearish movement could push the price to reach the 0.67000 level that was tested in mid-July trading.
On the other hand, if the price shows a stronger bullish pattern, the focussed resistance to test is at 0.7000 after the rise above the high reached yesterday.
If the increase succeeds in breaking through the 0.7000 zone, the main target that will be tested next is the previous concentration zone at the height of 0.71000.
