The Australian dollar reacted to some data published in early trading this week and can be seen on the price chart.
On Tuesday yesterday, there was a momentary jump in the value of the Australian dollar after being affected by the actions of the People's Bank of China (PBOC) which pegged the Yuan at a higher level than expected.
However, it was a different story in the Asian session this morning (Wednesday) when the focus was on the release of Australia's consumer price index (CPI) data for May.
Australia's annual inflation reading came in lower at 5.6% compared to the previous month's 6.8%, when forecasts were for it to fall to 6.1%.
This is Australia's lowest inflation since April 2022 and this decline is seen as making it more difficult for the central bank to continue further monetary policy tightening.
If you look at the chart of the AUD/USD currency pair, there has been a decline to the latest 3-week low.
On Tuesday yesterday, the price surged to the 0.67200 level triggering expectations of a change in direction as the price began to move above the Moving Average 50 (MA50) support level on the 1-hour time frame of the chart.
However, prices retreated again until yesterday's New York session before a significant decline was exhibited in the Asian session this morning due to the reaction to the published CPI data.
Returning to move below the MA50 level again, seeing the price resume the bearish trend movement like last week.
The price has dropped to around 0.66200 before the price movement started to slow towards the opening of the European session market.
A lower decline is expected to continue with a target towards the RBS (resistance become support) zone of 0.65400.
If the decline continues, the price will reach the support zone last May around 0.64600.
In the event of a price surge again, the 0.67000 level is seen as an important zone to be tested before the trend change signal is evaluated with the MA50 level to be tested.
A higher increase if it continues above the level reached yesterday can lead up to the concentration zone of 0.67600.
