The AUD/USD pair is experiencing a volatile trading session, with the currency pair currently trading 0.35% higher at 0.6945. This upward movement is primarily attributed to the underperformance of the US Dollar (USD) against its major counterparts, particularly the New Zealand Dollar (NZD). The upcoming release of the US Consumer Price Index (CPI) data for June is expected to influence market sentiment, as the Federal Reserve (Fed) has shown a heightened concern for high inflation. The latest comments from Fed Governor Christopher Waller indicate a potential need for further monetary tightening if inflation figures remain elevated. The estimated CPI growth for June is expected to be 3.8% Year-on-Year (YoY), a slight decrease from the previous month's 4.2%. This data, coupled with the upbeat China Trade Balance figures, has strengthened the Australian Dollar (AUD). However, the AUD/USD pair's near-term outlook remains bearish, as it continues to trade below the 20-day Exponential Moving Average (EMA) at 0.6957. This technical analysis suggests persistent overhead supply, with the Relative Strength Index (RSI) indicating mild negative momentum. The immediate resistance level is at the 20-day EMA, and a daily close above this barrier could potentially ease the current downside bias. The pair's recovery could extend towards the June 23 high at 0.7006 if it breaks above the EMA. On the other hand, a drop below the March low of 0.6904 could lead to a slide towards the January 7 high of 0.6766. The Chinese Trade Balance, a critical economic indicator, is expected to generate volatility in the Forex market, with a high reading seen as positive for the Chinese Yuan (CNY) and a low reading as negative. This indicator's impact on the global economy cannot be overstated, making it a crucial factor in the AUD/USD pair's performance.
