AUDUSD remains strong ahead of US inflation data

AUDUSD remains constructive, consolidating Tuesday’s 0.80% advance. Although the RBNZ’s 25 basis point rate cut this morning negatively impacted the Aussie dollar, the dips were limited by strong near-term bullish sentiment driven by revived risk appetite.

Technical indicators on the daily chart are bullish, with rising positive momentum and moving averages turning to a bullish setup. Strong bullish signals have been generated by a close above the converged 100/200 DMAs and a penetration into the rising daily cloud.

However, overbought conditions may temper further bullish action as the market awaits the release of key US inflation data. If the CPI numbers come in below expectations, AUDUSD could benefit, potentially extending gains towards targets at 0.6680 (daily cloud top) and 0.6692 (Fibo 76.4% of 0.6798/0.6348).

Conversely, if July CPI exceeds expectations, the AUD could weaken, risking a decline through initial support in the 0.6613/0.6596 zone (daily cloud base and converged 100/200 DMAs).

Res: 0.6642; 0.6680; 0.6692; 0.6714
Sup: 0.6613; 0.6596; 0.6573; 0.6555