AUD/USD Hits Turbulence: Inflation Woes Trigger Sell Signal

Australia reported lower-than-expected inflation figures, with the yearly inflation rate dropping to 3.4% from 4.3%, falling short of the anticipated 3.7%. This development has undeniably cast a shadow over the Australian Dollar, contributing to its weakening and bolstering the sell signal.

From a technical perspective, the AUD/USD pair exhibits a clear bearish trend. The chart reveals a wedge formation, delineated with blue lines, from which the price has decisively broken downward. Prior to this, the pair was already hinting at bearishness, evident from a pennant pattern (outlined with black lines) that also saw a downward breakout.

The current sell signal targets the crucial horizontal support at 0.6525, marked in green. This level stands as a pivotal point for the AUD/USD, potentially acting as a springboard for a bounce. However, should the price breach this green line, it would not only reinforce the existing short-term and mid-term sell signals but also potentially usher in a significant long-term bearish trend for the pair.