The USD fell away a touch in Tuesday trade and that meant we had a little bit of strength in the AUD/USD. However, there’s no doubt that the current trend is to the downside.

Looking at the chart, we’ve really had a huge range in a short period of time. From 0.7650 all the way up to 0.8100. And down again toward where we started, or so it seems.

The key resistance level at the moment for me is 0.7900. I like the look of selling at that point looking at more downside. 0.7950 would be the next upside target.

If we move much higher than that, then we would need to assess the short-term trend as we might be entering a consolidation phase.

Key Data

The big data point today on the minds of all traders is US CPI. The USD is going to be held to ransom by this print and it could mean a sharp spike higher in the USD.

I am bullish on the USD, while at the same time bearish on the AUD. That’s why this print is so important. If we get a strong number, then the chance of US rate hikes, increase dramatically.

Which means more upside for the dollar.