Will the US dollar weaken if the consumer price index (CPI) data of the United States (US) is published with declining numbers as predicted?
In theory, that's the situation that will happen because the continued decline in the US inflation rate will expect the Federal Reserve (Fed) to continue to slow down their monetary policy.
Slowing down the policy will make the value of the currency weaken.
Thus, the US dollar is likely to weaken and this will give room for other major currencies in the market to rise.
For example, let's see what to expect for the price movement on the chart of the AUD/USD currency pair.
If you look at the last week's movement, the price showing an increase has reached the expected level of the 0.7000 zone, but has not managed to stay above the zone.
The bearishness has resumed seeing the price return to the 0.69000 focus zone until trading has resumed at the opening of the week.
However, at the end of last weekend it gave a bearish signal when the price started to move below the Moving Average 50 (MA50) obstacle level on the 1-hour time frame on the AUD/USD chart.
If the US inflation data published this week makes the US dollar weaker, it is likely that there will be a rebound in the price from the 0.69000 zone.
The increase will continue towards the 0.7000 level for the price to test the SBR (support become resistance) zone.
Successfully breaking through to a higher level, the target for the price increase is heading towards the zone around 0.71000.
However, if on the other hand the situation that occurs is a strengthening of the US dollar, the price will be pushed lower below the 0.69000 zone.
A further drop in price is likely to break past the lows reached last week around 0.68600.
The price could even fall lower below the 0.68300 zone and record a recent 6-week low.
For the Aussie dollar, investors will also focus on the publication of the Australian jobs data report on Thursday which will influence price movements.
