The Australian dollar posted interesting moves in the Asian session this morning (Wednesday) as market focus turned to published Australian inflation data.
Australia's consumer price index (CPI) recorded a higher increase than the forecast of 3.8% to 4.0% for June.
A further increase in inflation in Australia will prompt the central bank to maintain a tight policy and consider whether interest rates should be raised.
This situation is seen to support the Aussie dollar currency to strengthen in the market when the central bank tends to remain in the phase of monetary policy tightening.
The Aussie dollar managed to strengthen again today after suffering a decline in the New York session yesterday under pressure from the strengthening of the US dollar currency.
If you look at the chart of the AUD/USD currency pair, the price dropped to around 0.66400 and the price slowed around that at the opening of the Asian session this morning.
However after the reaction to the published Australian CPI data, prices have since surged above yesterday's highs of 0.66700.
The price increase continued until the early opening of the European session and was seen getting closer to the 0.67000 concentration zone.
A higher move could happen if the price breaks through the zone for the price to record a recent 5-month high.
It is likely that the next price target will be around 0.67700 to reach.
But if it starts to show signs of making another decline, investors will be cautious while keeping an eye on the latest indicators.
A low price drop if it happens this week is expected to reach back to the concentration zone of the previous week which is around 0.66000.
