The dollar edged higher against major currencies Tuesday after U.S. inflation data encouraged investors to think the Federal Reserve could raise interest rates sooner than expected. Overall, growth in Australia's major trading partners looked to have remained around average in the early months of 2014, although there were signs that growth in China has eased.

The pair is taking support at 0.933 levels and has been in a down trend from 0.9460 levels. The pair will face more selling pressure after a day close below 0.933 levels up to 0.9247 and 0.9205 levels. Traders are looking for an upbeat tone regarding the US economy. This would indicate interest rates to remain stable which could help to underpin AUD. In addition, the latest Fed minutes highlighted the importance of higher CPI in the wake of the drop in the unemployment rate. This also would boost interest in the U.S. Dollar because it would put the Fed on track to begin raising interest rates as early as next spring or summer.

In the daily chart the RSI gives a sell signal. The pair is trading between 0.933-0.9448 levels. Either side breaks will determine the further way in coming trading sessions. Sell on rallies is the best strategy for the next couple of days. The pair can fly up to 0.956-0.958 levels if it closes the day above the 0.9448 levels. On the down side, the 0.9205 level is the trend decider level. We expect before making a new high the pair will correct up to 0.926 or 0.9205 levels.

On an intraday basis, the pair is trading below the 50SMA in the H4 chart. It is facing resistance at 0.9348 and the immediate support exist at 0.9322 levels. If the pair breaks below the 0.9322 levels, it will cause panic and it will drift up to 0.9286, 0.9265, 0.9247 and 0.92 levels.

Recommendations:

Safe traders-

Sell below 0.9322 for targets 0.9286, 0.9265, 0.9247.

Risky traders sell at cmp with sl 0.9367 on cb.