- AUD/USD spiked to hit session highs at 0.7041 on upbeat Q4 CPI data, which came in at 0.4% q/q above expectations for 0.1% rise.
- The pair has since given up most of the gains, but is still holding above the 0.70 handle, trading at 0.7012 as we write.
- We see a positive 5&10 DMA cross over and RSI is at 46 with room to run. MACD also indicates gains.
- Weakness in the pair is only below 0.6920 (trendline support), breaks below could test 0.6828 levels.
- On the upside immediate hurdle is seen at 0.7021 (Jan 26 highs), and then 0.7031 (Jan 25th highs).
- Developments in China and oil will dictate further price action in the pair, there is scope for test on 0.7045.
Recommendation: Good to buy dips around 0.70 levels, SL: 0.6950, TP: 0.7045/60
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