AUD/USD struggles to sustain gains despite stronger-than-expected Australian CPI
The AUD/USD reached a new 8-month high during the Asian session on Wednesday, boosted by a stronger-than-expected Australian July CPI. However, it has struggled to maintain gains above the 0.6800 level.
The subsequent pullback, though mild, raises initial concerns that the larger rally from the August 5 spike low at 0.6348 may be losing momentum.
Three consecutive failures to surpass the previous peak at 0.6798 (July 11) and today’s (so far) unsuccessful break above it support this view. Additionally, fading positive momentum and a bearish divergence in the Stochastics on the daily chart, along with Thursday’s twist in the daily cloud, add to the negative outlook.
The immediate bias is expected to stay bullish as long as the price remains above 0.6761 (the former top from August 21, the August 27 low, and the upper 20-day Bollinger Band). A break below this level would signal the start of a bearish move, with potential declines towards 0.6734/00 (the rising 10DMA and the higher base from August 22/23), which is protecting more significant support levels (a cluster of daily moving averages in the 0.6655/10 zone and the 38.2% Fibonacci retracement of the 0.6348/0.6812 rally).
Resistance: 0.6812; 0.6839; 0.6871; 0.6904
Support: 0.6761; 0.6734; 0.6700; 0.6655
