AUD/USD Price Analysis: Bears seeking another test of critical support near 0.71 the figure
|- AUD/USD bears are in play for the sessions ahead.
- Bulls will be keen on a daily retest of the neckline of the M-formation and Aussie CPI could be just the ticket.
AUD/USD has resumed the downside in Asia despite the inflation data that surprised to the upside in a big way.
''Underlying inflation accelerated to 1% QoQ and 2.6% YoY in Q4. Quarterly trimmed mean inflation is now at its highest rate since Q3 2008, and the annual figure pushed above the mid-point of the Reserve Bank of Australia’s target band for the first time since mid-2014,'' analysts said on the matter.
''The RBA will now almost certainly need to adjust its forward guidance to acknowledge a rate hike is possible this year. We suspect the RBA won’t shift to a 2022 rate hike as being its central case, likely wanting to see wages growth clearly accelerate. But earlier than expected evidence of this is also possible.''
Meanwhile, the technical outlook is more mixed.
AUD/USD daily chart
From a daily perspective, the bulls are potentially going to be in play as per the M-formation's neckline and a 38.2% Fibonacci retracement. The M-formation is a reversion pattern that has a high completion rate. However, this is on a daily basis. For now, the focus is on filling in the wick to the downside towards 0.71 the figure for the sessions ahead:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.