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The Australian dollar took its time in waking up from the long Easter weekend and is now looking strong: not only bouncing from the bottom but also moving to a higher range.

The Australian dollar faces two important data releases, 15 minutes apart. These could determine if the bounce is just a correction before the bigger fall, or if the pair could extend the move and reach the higher levels it enjoyed earlier in the month.

Update: this was the rise before the fall –  AUD/USD down 100 pips cooling Australian inflation

Towards the Easter vacation, AUD/USD fell and found support at 0.9320. Several bounces during low volume didn’t really help the pair. When markets woke up, the Aussie looked around and eventually moved higher, trading at 0.9375 at the time of writing. The Australian  CB Leading Index moved up by 0.3% and this had some minor impact.

The next level of resistance awaits at 0.9390, which capped the pair twice last week. Weak support is at 0.9360.

And this is where the data comes around. Let’s see the chart first:

AUDUSD April 22 23 2014 technical one hour chart before Australian CPI Chinese HSBC Manufacturing Flash

  • Australian CPI: Prices were expected to rise 0.8% in Q1 2014, just like in the previous quarter. This data is critical for the next rate decision. It is important to remember that the quarterly release, rather than monthly, carries more weight than in other countries. This is due at 1:30 GMT.
  • Chinese HSBC Flash Manufacturing PMI: Considered by some as the most reliable figure for the China, Australia’s No. 1 trade partner, it is expected to rise from the low level of 48 to 48.4. Any figure under 50 represents contraction. A slowing China is bad for global growth and for Australia. A recovery could certainly boost the A$. This is released at 1:45 GMT.

More resistance is at 0.9425, followed by the peak of 0.9460. More support is at the round number of 0.93 followed by 0.9250. For more, see the AUDUSD prediction.