AUD/USD clings to upbeat CPI-led strong gains to 0.7700 handle

The AUD/USD pair maintained its bid tone and was seen consolidating strong gains led by upbeat Australian CPI print. 

Currently hovering around 0.7700 region, today's Australian inflation figures for third quarter of 2016 showed a marked improvement. Headline inflation, as measured by CPI, came-in at 0.7% q-o-q and surpassed market expectations pointing to a reading of 0.4%. Meanwhile, RBA's trimmed mean CPI matched consensus estimates and printed 0.4% on quarterly basis. Traders rushed to cover their bearish bets against the Aussie as stronger-than-expected CPI print dampened expectations of an immediate monetary easing by RBA. 

The pair, however, seems to have exhausted upbeat CPI-led buying interest amid broadly stronger greenback, which extended its recent up-trend on growing expectations that the Federal Reserve would eventually move towards raising interest rates at its December meeting.

Later during NA session, new home sales data from the US might provide some short-term trading opportunities. Meanwhile, this week's key US macro data - quarterly GDP print and monthly durable goods orders, would remain on investors’ radar and would be looked upon to determine the next leg of directional move for the pair. 

Technical levels to watch

Immediate upside resistance is pegged near 0.7725 level above which a fresh bout of short-covering is likely to lift the pair immediately towards August monthly highs resistance near 0.7750-55 region. On the downside, 0.7685-80 area now seems to protect immediate downside, which if broken is likely to accelerate the slide towards 0.7640 intermediate support before the pair eventually drops back to 0.7600 handle.