Bears are taking a breather on Wednesday after a steep fall in past four days, when risk-sensitive Aussie dollar was down 4.3%, pressured by s robust greenback and strong risk aversion.
Today’s release of Australian inflation data showed consumer prices rose well above expectations in Q1, signaling the RBA may start raising interest rates as early as next week that gave fresh boost to Australian dollar and paused larger bears.
The price action is holding around Fibo 76.4% of 0.6967/0.7661 (0.7131) which was dented by a brief close below on Tuesday, failure to register a clear break lower would further question bears.
Daily studies remain in full bearish setup, but momentum is turning north in the deep negative territory that gives initial signal that bears may stay on hold for some time.
Today’s action is also forming an inverted hammer candle that would add to positive signals if the candle will be validated on closing.
Otherwise, the downside will remain at high risk, with repeated close below 0.7131 pivot to unmask initial targets at 0.7090 zone and psychological 0.70 support.
Res: 0.7131; 0.7190; 0.7232; 0.7261.
Sup: 0.7100; 0.7086; 0.7051; 0.7033.
