Aussie Gains Ground as US Dollar Softens

The AUD/USD currency pair saw a slight rally on Wednesday as the US dollar softened. According to Christopher Lewis, a technical analyst at DailyForex, this is not surprising given the current market conditions.

Lewis notes that the Australian Dollar has been grinding upwards, and its recent performance suggests it's above the 50-day EMA. The CPI numbers released on Wednesday were as anticipated, which helped alleviate fears of the Federal Reserve tightening monetary policy.

As a result, Lewis believes short-term pullbacks could present buying opportunities, especially near the 50-day EMA at 0.7016. However, breaking below this level would be a bad sign for the Aussie in general, as it would suggest the market is losing momentum and potentially heading towards the 200-day EMA around 0.6950.

Lewis points out that interest rate differentials favor the US dollar but notes that it's not significant enough to reverse trader sentiment. The analyst also mentions that Australia serves as a proxy for China, gold, and other commodities, which could impact market behavior.