Is it possible to expect the price on the AUD/USD currency pair chart to go higher?
The price trend is more in favor of price movement to a higher level after traders evaluated the release of United States (US) inflation data in the New York session last night.
The declining inflation rate is seen to strengthen expectations for the Federal Reserve (Fed) to move towards easing monetary policy.
Thus, the US dollar which will weaken the effect of the looser policy will push the price increase to occur on the AUD/USD chart.
However, there are constraints that traders need to know.
The factor preventing the US dollar from experiencing further depreciation is based on the US NFP employment data report that was published last Friday featuring an encouraging reading.
This is seen to open up space for the Fed to continue raising interest rates in an effort to lower inflation, which will also make the value of the US dollar stronger.
If you look at the AUD/USD chart, there was a surge reaching the level of 0.68180 during the initial reaction to yesterday's inflation data release.
However, shortly afterwards the price plunged back to the level of the start of the surge which is around 0.67500 and slowly ended the trading of the New York session.
Continuing trading today (Thursday), until the beginning of the European session, the price is slowly moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the AUD/USD chart, indicating a bullish movement preparation signal for the price.
If the rise continues again, the high level reached yesterday will be overcome before the price continues to the latest 11-week high.
The target for the continued rise is towards the 0.69000 concentration zone.
However if the price plunges below the MA50 support level, it will be a sign that a further decline in price may occur.
The price will go down towards the RBS (resistance become support) zone of 0.67000 before the price reaction displayed in that zone will be evaluated to determine further movement.
A break lower would expect the price to reach around 0.66500 and continue the bearish movement.
