AUD/USD bounces off two-week lows post-US CPI, still in the red near mid-0.7300s


  • A modest USD weakness assisted AUD/USD to stage a modest bounce from two-week lows.
  • Softer-than-expected US consumer inflation figures exerted additional pressure on the USD.
  • Higher US bond yields helped limit any deeper USD losses and capped the upside for the pair.

The AUD/USD pair managed to recover a major part of its intraday losses to two-week lows and climbed back above mid-0.7300s post-US CPI report.

The pair came under some renewed selling pressure on Tuesday after the Reserve Bank of Australia (RBA) Governor Philip Lowe downplayed speculations for an earlier than expected interest rate hike. However, a modest US dollar weakness, along with the underlying bullish sentiment extended some support to the perceived riskier aussie and helped limit any deeper losses.

The USD lost some additional ground following the release of softer-than-expected US consumer inflation figures. According to the data published by the US Bureau of Labor Statistics, the headline CPI misses market expectations and decelerated to 0.3% in August from 0.5% in the previous month. On yearly basis, the CPI edged lower to 5.3%, as anticipated.

More importantly, core inflation, which excludes food and energy prices, also fell short of consensus estimates and recorded a modest 0.1% rise during the reported month. The yearly core CPI decelerated to 4% from 4.3% in July and dashed hopes for an imminent Fed taper announcement at the upcoming monetary policy meeting on September 20-21.

Investors, however, still seem convinced that the Fed would eventually begin rolling back its massive pandemic-era stimulus later this year. This was reinforced by a goodish intraday move up in the US Treasury bond yields, which acted as a tailwind for the greenback and kept a lid on any meaningful upside for the AUD/USD pair, at least for now.

This makes it prudent to wait for some strong follow-through buying before confirming that the recent pullback from the highest level since mid-July has run its course and place aggressive bullish bets around the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7336
Today Daily Change -0.0033
Today Daily Change % -0.45
Today daily open 0.7369
 
Trends
Daily SMA20 0.7309
Daily SMA50 0.7359
Daily SMA100 0.7525
Daily SMA200 0.7609
 
Levels
Previous Daily High 0.7377
Previous Daily Low 0.7336
Previous Weekly High 0.7469
Previous Weekly Low 0.7345
Previous Monthly High 0.7427
Previous Monthly Low 0.7106
Daily Fibonacci 38.2% 0.7361
Daily Fibonacci 61.8% 0.7351
Daily Pivot Point S1 0.7344
Daily Pivot Point S2 0.7319
Daily Pivot Point S3 0.7302
Daily Pivot Point R1 0.7385
Daily Pivot Point R2 0.7402
Daily Pivot Point R3 0.7427

 

 

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