AUDUSD US inflation continues to break records

AUDUSD US inflation continues to break records. Due to skyrocketing inflation in the US, the AUD/USD pair corrects upwards, trading at 0.7173.

Although the next peak in the incidence of COVID-19 in Australia can be considered passed, the statistics on new infections remain quite high: last week, the figure hovered around 1450 cases per day, which does not allow the authorities of some regions to ease quarantine restrictions. As stated by the head of the Bank of Australia, Philip Lowe, it prevents the economy from recovering at a higher pace, which, in turn, keeps the national currency from more dynamic growth.

The US dollar has been moving within a narrow sideways range since the end of November. According to the latest data, the rate of inflation in the United States accelerated, and the index of the core CPI reached 4.9% YoY. The consumer price index renewed a multi-year record, rising to 6.8% from 6.2% a month earlier. Judging by these data, the US Federal Reserve has practically no choice: the regulator will have to quickly reduce the volume of the quantitative easing (QE) program and raise the interest rate. These actions can be announced at the next meeting, held on Wednesday.

Support and resistance

On the global chart, the price forms a downtrend, within which a reversal is being prepared. Technical indicators keep a weakening sell signal: indicator Alligator’s EMA fluctuations range narrows, and the AO histogram forms upward bars.

Resistance levels: 0.7222, 0.7458.

Support levels: 0.7115, 0.6992.

AUDUSD US inflation continues to break records

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