AUD/USD rebounds swiftly from US CPI-led dip to weekly lows, jumps to mid-0.7700s

  • AUD/USD refreshed weekly lows in reaction to hotter-than-expected US CPI report.
  • The headline CPI rose 0.6% in May and the yearly rate accelerated to 5% from 4.2%.
  • Investors still seem unconvinced that the Fed could begin tapering its bond purchases.

The AUD/USD pair reversed a knee-jerk fall to weekly lows and refreshed daily tops, around mid-0.7700s in reaction to hotter-than-expected US inflation figures.

The pair witnessed some selling and touched an intraday low level of 0.7718 following the release of the US CPI report for May. The headline CPI moderated to 0.6% MoM in May as against consensus estimates pointing to a fall to 0.4% from 0.8% previous. This was enough to lift the yearly rate to 5.0%, a big upside surprise for the second straight month.

Adding to this, the core CPI increased 0.7% MoM and 3.7% YoY, both surpassing market expectations. The data puts pressure on the policymakers to defend the transitory narrative and fueled speculations that the Fed could taper its bond purchases sooner rather than later. Investors, however, preferred to wait for evidence to see if inflationary pressure is sustainable.

This was evident from a quick reversal of the knee-jerk market reaction and the emergence of some fresh selling around the USD. This, in turn, assisted the AUD/USD pair to rebound nearly 30 pips from daily swing lows. That said, it will be interesting to see if bulls are able to capitalize on the move or the pair meets with some fresh supply at higher levels.

Technical levels to watch


Today last price 0.7735
Today Daily Change 0.0004
Today Daily Change % 0.05
Today daily open 0.7731
Daily SMA20 0.7743
Daily SMA50 0.773
Daily SMA100 0.7728
Daily SMA200 0.7541
Previous Daily High 0.7763
Previous Daily Low 0.7724
Previous Weekly High 0.7774
Previous Weekly Low 0.7644
Previous Monthly High 0.7892
Previous Monthly Low 0.7674
Daily Fibonacci 38.2% 0.7739
Daily Fibonacci 61.8% 0.7748
Daily Pivot Point S1 0.7715
Daily Pivot Point S2 0.77
Daily Pivot Point S3 0.7676
Daily Pivot Point R1 0.7755
Daily Pivot Point R2 0.7779
Daily Pivot Point R3 0.7794



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