• AUD/USD rose on Wednesday as hotter-than-expected inflation data fueled expectations of additional interest rate hikes this year.
• January consumer prices rose 0.4% on the month, keeping annual inflation at 3.8%, partly driven by higher housing and healthcare costs..
• The key trimmed mean core inflation gauge rose 0.3% in the month, lifting the annual rate to 3.4% — above forecasts and the highest since the third quarter of 2024..
• That marked a seventh consecutive month above the Reserve Bank of Australia’s 2%–3% target range, heightening the risk of a strong inflation outcome for the March quarter overall.
•RBA Governor Michele Bullock will have a chance to offer her own reaction to the January CPI when appearing at a Melbourne University event later on Wednesday.
• Immediate resistance is located at 0.7143 (23.6%fib), any close above will push the pair towards 0.7178(Higher BB).
• Support is seen at 0.7047 (SMA 20) and break below could take the pair towards 0.7037 (38.2%fib).
Recommendation: Good to buy around 0.7040, with stop loss of 0.6970 and target price of 0.7110
