Market analysts tend to view prices on the AUD/USD currency pair chart to experience a lower decline towards the end of the week.
Why?
This is based on the inflation data of the United States (US) published yesterday when the market has seen the annual reading of the consumer price index (CPI) recorded a slow decline to 6.4% from 6.5%, missing the forecast of 6.2%.
The reading of monthly inflation data met the forecast when it increased to 0.5% for the month of January.
So, the market sees difficulties for the Federal Reserve (Fed) to slow down policy tightening. Even some policy makers give views for the option of interest rate hikes still need to continue.
Thus, this will encourage the US dollar currency to strengthen if the central bank remains in the phase of monetary policy tightening.
If you look at the AUD/USD chart, there is also a price reaction when the US dollar also shrinks while the market is still digesting the data published in the New York session.
However, the price plunge occurred again and a slight increase was shown at the end of the session, however, did not reach the height of the previous surge.
The price has soared to a high of 0.70300 before dropping back down and hovering below the 0.7000 level at the close of the session.
Resuming trading today (Wednesday), a plunge back is displayed indicating the strengthening of the US dollar continues until the price drops below the support level of the Moving Average 50 (MA50) on the movement in the 1-hour time frame.
The bearish indication of the price will push the expected decline towards the 0.69000 support or extended lower to the 0.68300 zone.
However, if there is a surge again, the price is seen to test the resistance zone at 0.7000 which has been tested several times since last week but failed to break through.
If the price manages to pass the SBR (support become resistance) zone, then the increase will continue again to reach a height of around 0.71000.
