AUD/USD Faces Downside Pressure Amidst Weak Inflation Data
Arslan Butt•Monday, July 10, 2023•1 min read
During the Asian session, the AUD/USD pair found intermediate support near the critical level of 0.6660. However, several factors are expected to contribute to its continued downward trajectory. Notably, China’s Consumer Price Index (CPI) reflects stagnant monthly inflation and a deceleration in the annual CPI, while the Producer Price Index (PPI) indicates vulnerability in both domestic and export demand.
Meanwhile, expectations are growing that inflation in the United States will persistently remain at elevated levels. June’s wage numbers surpassed consensus expectations, with monthly economic data showing a 0.4% increase and Annualized Average Hourly Earnings remaining steady at 4.4%. These factors present challenges for Federal Reserve (Fed) policymakers as they navigate future monetary policy decisions.
In terms of technical analysis, the AUD/USD pair has encountered strong resistance from the downward-sloping trendline of a Descending Triangle chart pattern observed on a two-hour scale. The trendline originates from the June 27 high at 0.6720, while horizontal support is established by the June 29 low at 0.6595. Supporting the Australian Dollar bulls, the 50-period Exponential Moving Average (EMA) at 0.6620 provides some stability.

The Relative Strength Index (RSI) (14) currently oscillates within the range of 40.00-60.00, indicating a non-directional performance and further reflecting the uncertainty surrounding the AUD/USD pair.
If the AUD/USD pair convincingly breaks below the June 29 low at 0.6595, it is expected to extend its decline towards the June 02 low at 0.6565, followed by the round-level support at 0.6500. Conversely, a clear break above the July 04 high at 0.6705 would open the possibility for potential gains towards the June 23 high at 0.6767, with the round-level resistance at 0.6800 becoming the next target.
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
Comments
0
0
votes
Article Rating
Subscribe
Login
Please login to comment
0 Comments
Oldest
Newest
Most Voted
Inline Feedbacks
View all comments
Sidebar rates
Add 3442
Related Posts
XM
Best Forex Brokers
