April 24, OctaFX – The Australian dollar declined today after the country released weak inflation data. In the first quarter, the country's headline consumer prices rose by 1.3%, which was lower than the expected 1.5%. It was also lower than the fourth quarter's 1.8%. On a QoQ basis, the prices were unchanged. The trimmed mean CPI for the quarter rose by 0.3% while the weighted mean CPI rose by a quarterly rate of 1.2%. These numbers show the challenge the Australian economy is facing. They also make the case that the country's central bank could be forced to cut rates later this year.
AUDUSD technical analysis
The AUDUSD pair started declining on Wednesday last week when it traded at 0.7205. Today, declines continued after weak CPI numbers. The pair’s price dropped to an intraday low of 0.7025, which was the lowest level since March 8.
On the four-hour chart, this price is deeply along the lower line of the Bollinger Bands while the RSI has dropped sharply to the current level of 17. The price is also lower than all the short and medium-term moving averages. Therefore, the pair could continue to drop, to test the important support price of 0.7000.
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