The Australian dollar rose in Asia on Wednesday despite downbeat Australian data released earlier (Q4 CPI fell below expectations (0.6% vs 0.7% f/c) and weaker than expected China’s Jan Manufacturing PMI (51.3 vs 51.5 f/c and 51.6 previous).
The Aussie was inflated by weaker US dollar, which fell after President Trump’s State of the Union speech, maintaining fragile sentiment ahead of key event, release of US monetary policy decision.
The pair maintains overall bullish tone as shallow corrective attempts were contained by rising 10SMA (currently at 0.8046), above which repeated strong downside rejections occurred (Tuesday / today).
Immediate bulls are expected to keep above 10 SMA and keep the structure intact for fresh attempts at 0.8135 (26 Jan peak, the highest since May 2015) and final push towards target at 0.8164 (14 May 2015 high / 50% retracement of 0.9503/0.6826 fall).
However, negative scenario on break below 10SMA and extension of pullback from 0.8135 cannot be ruled out as bearish divergence on overbought daily RSI warns of deeper correction.

Res: 0.8118; 0.8135; 0.8164; 0.8200
Sup: 0.8046; 0.8000; 0.7969; 0.7896