AUD/USD hits three-day low as Australia core CPI prints at record lows
|The offered tone around the Aussie dollar strengthened, pushing the AUD/USD to a three-day low of 0.7546 after the data released in Australia showed the core CPI fell to record low of 1.6% y/y.
The ‘trimmed mean’ figure tracked by the RBA came-in at 0.4% q/q, which is below the market estimate of 0.5%.
The Aussie could suffer sharp losses
Heading into the inflation data release, the futures markets were pricing-in only an 8% probability of RBA rate cut. With inflation missing estimates, the probability of a rate cut is set to increase, thus Aussie could suffer sharp losses during the day ahead.
Ahead in the day, the pair may find support if the USD side of the story continues to remain weak.
AUD/USD Technical Levels
The pair was last seen trading around 0.7565 levels. A break above 0.7609 (previous day’s high) would open doors for 0.7632 (76.4% of Trump sell-off), above which a major hurdle is seen at 0.7689 (Nov 1 high). On the other hand, a breakdown of support at 0.7536 (10-DMA) would shift risk in favor of a drop to 0.7498 (200-DMA) and 0.7469 (50% Fib of Trump rally).
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