- A general slide of the dollar boosts AUD/USD to the upside.
- Pair faces next resistance around 0.7275.
- US inflation rises to 7%, largest increase in nearly 40 years.
The US dollar is falling sharply amid higher equity prices and following the US CPI December report. The AUD/USD jumped to 0.7266 during the American session, reaching the highest level in a week. It remains around the top, with the bullish momentum intact.
The decline of the dollar and a rally in commodity prices are boosting AUD/USD. The DXY is falling by 0.40%, at 95.20, the lowest since November 15. The annual inflation rate in the US reached at 7%, the highest since 1982. The number did not boost US yields which printed fresh lows and weighed on the dollar.
AUD/USD likely to test recent tops
The pair is approaching the 0.7275/80 zone that capped the upside late in December and early January. A break higher would strengthen the positive outlook for the aussie. The next level to watch is the 100-day simple moving average at 0.7285.
If AUD/USD fails to break the mentioned resistance, a retreat toward the 20-day moving average at 0.7200 seems likely.