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AUD/USD remains on track to close below 0.7750, loses more than 1%

  • AUD/USD looks to post its largest daily percentage loss since March. 
  • US Dollar Index rose sharply after US inflation data.
  • Wall Street's main indexes suffer heavy losses on Wednesday.

The AUD/USD pair broke below 0.7800 on Wednesday and fell sharply in the second half of the day pressured by the broad-based USD strength. As of writing, the pair was down 1.33% on a daily basis at 0.7735.

US CPI data fuels USD rally

The data published by the US Bureau of Labor Statistics revealed on Wednesday that annual inflation, as measured by the Consumer Price Index (CPI), rose to 4.2% in April from 2.6% in March. Additionally, the Core CPI climbed to 3% from 1.6% in the same period. Both of these reading surpassed analysts' estimate by a wide margin and triggered a strong upsurge in US Treasury bond yields.

At the moment, the benchmark 10-year US Treasury bond yield is up 4.3% on the day and the US Dollar Index is rising 0.62% at 90.72.

Meanwhile, Wall Street's main indexes are down between 1.5% and 2.4%, providing an additional boost to the safe-haven USD.

In the early trading hours of the Asian session on Thursday, the HIA New Home Sales and May Consumer Inflation Expectations will be featured in the Australian economic docket. Later in the day, the US Department of Labor's weekly Initial Jobless Claims data and April Producer Price Index (PPI) figures from the US will be looked upon for fresh impetus as well.

Technical levels to watch for

AUD/USD

Overview
Today last price0.7731
Today Daily Change-0.0109
Today Daily Change %-1.39
Today daily open0.784
 
Trends
Daily SMA200.7762
Daily SMA500.7711
Daily SMA1000.7718
Daily SMA2000.7487
 
Levels
Previous Daily High0.7857
Previous Daily Low0.782
Previous Weekly High0.7863
Previous Weekly Low0.7674
Previous Monthly High0.7819
Previous Monthly Low0.7531
Daily Fibonacci 38.2%0.7843
Daily Fibonacci 61.8%0.7834
Daily Pivot Point S10.7821
Daily Pivot Point S20.7802
Daily Pivot Point S30.7784
Daily Pivot Point R10.7859
Daily Pivot Point R20.7876
Daily Pivot Point R30.7896

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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