AUD/USD Coming Off the Highs After 2022 Inflation Surge, As Risk Sentiment Abates
Skerdian Meta • 1 min read
The Australian dollar rallied against the USD during the Ain session yesterday, moving to a new session high breaking above the earlier high for the day at 0.70486. But it reversed back, showing signs of hesitation yet again after the US services and manufacturing reports were released, which came above expectations.
But, the 100 SMA (green) held as support on the H1 chart and we saw a bounce off that moving average, since the numbers showed that activity in both these sectors continue to remain in contraction, despite the slight improvement. We opened a buy forex signal above the 100 SMA and that trade closed in profit after the bullish reversal.
Although, a lot of this will come down to the idea of China reopening, which of course helps Australia as China is the largest consumer of Australian mining products. Earlier we saw a jump in risk assets with AUD/USD surging to 0.7120.
AUD/USD H4 Chart – Looking to Make New Highs?
MAs are supporting the price on dips
So, the overall trend remains bullish for this pair, although most of the momentum has come for the USD side, which has been retreating fast in the last few months. Although the increasing annual inflation in Australia as shown in the CPI report below, has played its part.
Australian Q1 and 2022 CPI Inflation Report
- CPI inflation rate (year on year): 7.8% vs 7.5% exp (7.3%prior)
- Trimmed-mean CPI (year on year): 6.9% vs 6.5% exp (6.1% previously)