AUD/USD started to bearish before that Quarterly Consumer Price Index report for Australia and the decision of the Federal Open Market Committee.
Can these resistance levels hold?
On the hourly timeframe, I can see the formation of a new downtrend, as the pair made lower tops connecting with a downtrend line.
AUD/USD for one hour Planned by TV
The pair is already testing the 38.2% Fibonacci retracement level of its most recent swing high and low, but it could remain on a larger pullback ahead of the CPI release.
If so, AUD/USD could test the 50% Fibonacci retracement level or the 61.8% level near the descending trend line resistance and .6800 key psychological sign.
This is also near R1 (.6810) which could be the line in the sand for a short-term bearish pullback. A breakout above this area could indicate that a reversal is in progress.
If the resistance areas hold, on the other hand, AUD/USD could resume sliding to the swing low at 0.6715 or even S1 (.6680). After all, technical indicators point to a continuation of the sell-off.
100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside while Stochastic is approaching the overbought area to reflect exhaustion among buyers.
Number experts expect weaker inflationary pressures in Australia for the second quarter, as the quarterly reading is set to drop from 1.4% to 1.0% while the annual figures could drop from 5.6% to 5.5%.
Weaker-than-expected results could lead to more bearishness for the Aussie, as this could dash hopes of another RBA hike. In the meantime, the dollar can remain supported until the arrival of the dollar Federal Open Market Committee decision This week as traders still expect a gain of 0.25%.
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