The Australian dollar is one of the currencies that investors are currently monitoring with the potential to increase due to several factors currently affecting the market.
Previously, pressure was felt by the Australian dollar when the Australian central bank (RBA) raised interest rates lower than expected.
However, the inflation data published in this morning's Asian session (Wednesday) which remained at 1.8% beat expectations to drop to 1.6% again fueling expectations for the RBA to resume aggressive policy tightening.
In addition, risk-on market sentiment following the release of China's strong economic growth data was also an additional factor to support the strengthening of the Aussie dollar.
Examining the price chart of the AUD/USD currency pair, although the downward pattern was displayed last Monday, the price managed to return to display an upward pattern again on Tuesday yesterday with a jump of around 100 pips to the 0.64000 level.
The rise continued today (Wednesday) after prices initially leveled above the 0.63700 level in the Asian session.
After investors digested published Australian inflation data, the gains continued in trading continuing into the European session with gains reaching a high of 0.64400 as of 3pm local time.
Price movement above the Moving Average 50 (MA50) support level on the 1-hour time frame still signals for a bullish trend movement.
The target for higher upside is to head towards the resistance zone at 0.65400 which was the focus of the early trade last October.
A rise to that level would mark the latest high for the 3-week trading period.
Meanwhile, if the price makes a decline again, the nearest support level of the price is seen to be at 0.63700 which will be tested.
A drop below that zone and past the MA50 support, would anticipate a change in the price trend to drop lower.
The support zone at 0.62000 that was tested a few weeks ago will come back into focus if the decline continues.
