The Australian dollar bears weigh on the support and look to US$0.6870 key support

May 12, 2022 - 2 weeks ago
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The Australian dollar’s bearish sentiment increases on Thursday as the slide is nearly upon the support area of US$0.6870.

On Wednesday, the global markets displayed a volatile session, as the U.S. consumer inflation data still holds around its record annual gain of 8.5% posted in March — the largest increase in more than 40 years.

In the U.S. Consumer Price Index (CPI), the annual pace of headline inflation fell to 8.3% in April from 8.5% in March, according to highly-anticipated U.S. Bureau of Labour Statistics data published Wednesday. That was above the expected decline to 8.1% YoY.

The MoM pace of headline inflation fell to 0.3% in April from 1.2% in March, above the expected drop to 0.2%. Core Consumer Price Index (CPI), a measure of core inflation, also exceeded expectations.

Based on the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is negative, while the Moving Average Convergence Divergence (MACD) holds a negative signal and supports bullish divergence.

The ADX (trend) indicator supports a mild bear trend.

From the returned weakness, eyes look to the US$0.6870 support and, if breached, expose the US$0.6650-90 area. Reassess from there.

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