AUD/NZD has been cruising higher inside an ascending channel for more than a month already, and it looks like another test of support is due.

Take a look at these inflection points on the 4-hour time frame!

AUD/NZD 4-hour Forex Chart by TradingView

Earlier today, the Australian economy printed a stronger than expected December CPI reading of 2.3% versus the consensus of a 2.2% year-on-year increase and the earlier 2.1% figure.

Some say that this upbeat inflation print could be enough for the Reserve Bank of Australia (RBA) to push back any easing plans until May, possibly keeping their currency afloat.

Will AUD/NZD be able to resume its climb, though?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian dollar and the New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

The 100 SMA is above the 200 SMA on this chart, suggesting that the uptrend is more likely to resume than to reverse. At the same time, the pair appears to be attracting buying interest at the 61.8% Fibonacci retracement level just above the ascending channel support.

Still, a larger dip could find more buyers at the channel bottom or at S1 (1.1020) so keep an eye out for any reversal candlesticks indicating that the rally is about to gain traction. In this case, look out for a continuation of the climb to the swing high near the 1.1100 major psychological mark or to the channel top near R1 (1.1120).

On the other hand, long red candlesticks closing below the channel support could mark the start of a reversal that could drag AUD/NZD to the next downside target at S2 (1.0970) or lower.

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!