Key Highlights
- AUD/USD corrected lower after trading to a new multi-month high at 0.7820.
- EUR/USD is holding the 1.2150 support, GBP/USD recovered above 1.3540.
- Crude oil price extended its rally and it traded to a new multi-month high above $53.00
- The US CPI (to be released today) is likely to increase 1.3% in Dec 2020 (YoY).
AUD/USD Technical Analysis
After a strong increase, the Aussie Dollar faced sellers above 0.7800 against the US Dollar. AUD/USD traded to a new multi-month high at 0.7820 before starting a downside correction.
Looking at the 4-hours chart, the pair broke the 0.7800 and 0.7750 support levels. There was also a break below a major bullish trend line at 0.7760. The pair dived below the 0.7700 level and even traded close to the 0.7660 level.
A low was formed near 0.7666 before the pair recovered. It broke the 0.7700 level and even surpassed the previous support at 0.7750 (resistance). It is now testing the 0.7770 resistance zone. There is also a connecting bearish trend line forming with resistance near 0.7775 on the same chart.
A clear break above 0.7770 and 0.7780 could set the pace for a fresh push above 0.7800. Conversely, the pair could start a fresh downward move towards the 0.7720 and 0.7700 support levels.
The 100 simple moving average (red, 4-hours) is also near 0.7650 to act as a strong support. Any more losses could lead the pair towards the 0.7600 zone.
Overall, AUD/USD must surpass 0.7780 to continue higher. If not, it could revisit 0.7660. Looking at EUR/USD, the pair struggled to stay above 1.2250 and tested the 1.2150 support. Conversely, GBP/USD broke the 1.3540 resistance level to revisit 1.3600.
Economic Releases
- US Consumer Price Index Dec 2020 (MoM) – Forecast +0.4%, versus +0.2% previous.
- US Consumer Price Index Dec 2020 (YoY) – Forecast +1.3%, versus +1.2% previous.
- US Consumer Price Index Ex Food & Energy Dec 2020 (YoY) – Forecast +1.6%, versus +1.6% previous.
