AUD/USD Current Price: 0.7288
- US inflation met the market’s expectations printing 7% YoY in December.
- The Australian macroeconomic calendar will have nothing to offer on Thursday.
- AUD/USD is trading at its highest since mid-November and is poised to extend its gains.
The AUD/USD pair trades a handful of pips below a daily high of 0.7288, benefiting from the broad greenback’s sell-off. Markets reacted to US inflation hitting its highest in four decades, as the Consumer Price Index was confirmed at 7% YoY, leaving the usual risk-off price pressure concerns aside. Wall Street rallied, although it lost momentum heading into the daily close. Meanwhile, US government bond yields kept retreating from fresh multi-month peaks, with that on the 10-year note bottoming at 1.71% and ending the day barely above such level.
Data wise, Australia did not release macroeconomic figures, but China published December inflation, which unexpectedly fell by 0.3% MoM, leaving an annual reading of 1.5%. The Producer Price Index resulted at 10.3% YoY, below the 11.1% expected. The Asian macroeconomic calendar has nothing relevant to offer on Thursday.
AUD/USD short-term technical outlook
The AUD/USD pair is trading a few pips above the 50% retracement of its 0.7555/0.6992 slide, a static support level at 0.7275. Technical readings in the daily chart indicate that the rally may continue, as technical indicators bounced from around their midlines, maintaining their bullish slopes. The pair is currently batting a flat 100 SMA, having been below it since mid-November.
In the near term and according to the 4-hour chart, the pair is overbought but still poised to extend its gains. The pair has accelerated above all of its moving averages, with the 20 SMA gaining strength upwards between the longer ones. Technical indicators are partially losing their strength but keep heading higher within overbought readings.
Support levels: 0.7275 0.7230 0.7195
Resistance levels: 0.7300 0.7340 0.7380
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