AUD/USD has climbed to a neat 0.6850

: George Solotarov; 13 July 2023; Hits: 217

AUD/USD has climbed to a neat 0.6850

The AUD/USD pair has jumped to near 0.6850 in the European session. The Aussie asset has rallied as the US Dollar Index (DXY) is failing to find support after a meaningful cool down in the United States June’s inflation report. S&P500 futures have extended gains in London, portraying an upbeat market mood. The USD Index has extended its sell-off to near 100.30 as a soft Consumer Price Index (CPI) report has drummed that the Federal Reserve (Fed) will hike interest rates only once by the year-end.

One-year forward consumer inflation expectations in the Australian region have remained well-anchored at 5.2% while investors were expecting a decline to 5.1%. This would discourage the Reserve Bank of Australia (RBA) from raising interest rates further. AUD/USD has delivered a perpendicular rally after a breakout of the Descending Triangle chart pattern on a four-hour scale. The Aussie asset is approaching the horizontal resistance plotted from June 16 high at 0.6900. Upward-sloping 20-period Exponential Moving Average (EMA) at 0.6738 indicates that the upside bias is extremely strong. The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, portraying strength in the upside momentum. After a stalwart rally, a minor correction to near June 22 high at 0.6806 would attract buyers for the upside of June 20 high at 0.6854 followed by June 16 high at 0.6900. On the flip side, a breakdown below June 27 high at 0.6720 would expose the asset to June 23 low at 0.6663 and July 10 low at 0.6624.