The Australian dollar shows indecision as early Tuesday’s trading was shaped in Doji, following Monday’s strong close in red after another rejection at strong 0.7440 resistance zone. Mixed techs show little direction signals (MA’s remain in bearish configuration, momentum is neutral, while slow stochastic heads north). The pair looks for a catalyst to break out of current congestion and tomorrow’s release of Australian CPI data expected to trigger stronger action. Annualized inflation is expected to rise in Q2 (2.2% f/c vs 1.9% in Q1) while positive forecast is also for quarterly figure (0.5% f/c vs 0.4% prev). Strong number could offer fresh support to the Aussie for eventual break through 0.7440 pivot and acceleration towards key barriers at 0.7474 (55SMA) and 0.7483 (10 July high). On the other side, downside risk is expected to persist while the price holds below a cluster of daily MA’s, with weaker than expected inflation number to add on existing negative tone and risk retest of 0.7310/17 base.
Res: 0.7388, 0.7404, 0.7442, 0.7474
Sup: 0.7359, 0.7343, 0.7317, 0.7310
