AUDUSD is struggling to trade past last week’s highs after Australia’s inflation data failed to impress. As of this writing, the currency pair is virtually unchanged from its opening price, trading around 0.7161.
According to the Australian Bureau of Statistics, CPI for Q2 2020 came in at 1.9%. This reading was slightly better than what was forecasted at -2.0%. Meanwhile, the trimmed mean CPI failed to meet expectations when it came in at -01%. According to analysts’ estimates, it was anticipated to print an uptick of 0.1%.
With these numbers, AUDUSD is struggling to attract bids. This is because higher inflation readings are often associated with stronger spending and economic growth.
On the 4-hour time frame, it can be seen that AUDUSD is trading around its previous resistance at 0.7160. If the ceiling holds, we could see the currency pair trade lower soon. AUDUSD could fall to 0.7065 where it could test the rising trendline (from connecting the lows of June 30, July 14, July 16, and July 20).
On the other hand, a strong close above yesterday’s high at 0.7176 could indicate that there are still buyers left in the market. AUDUSD could then continue trading higher to 0.7263 where it could test the 200 SMA on the weekly time frame.