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AUD/USD slips below 0.6700 as downbeat Australia inflation recall Aussie bears

  • AUD/USD takes offers to refresh intraday low, snaps two-day uptrend on weak Australia inflation data.
  • Australia’s Monthly CPI dropped to 6.8% YoY in February versus 7.1% YoY expected and 7.4% prior.
  • Market sentiment remains positive despite mixed concerns about the key central banks’ next moves.

AUD/USD drops 20 pips to 0.6690 as Aussie inflation disappoints during early Wednesday. In doing so, the risk barometer pair snaps two-day winning streak.

That said, Australia’s Monthly Consumer Price Index dropped to 6.8% YoY in February versus 7.1% expected and 7.4% prior.

Given the latest slump in the inflation data, the odds of witnessing another 0.25% rate hike from the Reserve Bank of Australia (RBA) become unwelcomed and drown the AUD/USD prices, especially after the downbeat Aussie Retail Sales.

Also read: Aussie CPI misses expectationsa and AUD drops below 0.6700

Contrary to the downbeat data, a firmer risk profile puts a floor under the AUD/USD pair even if it drops by the press time.

While tracing the key catalysts for the latest risk-on mood, receding fears of a banking crisis and hopes of less aggressive rate hikes from the top-tier central banks seem to gain the market’s attention. Also keeping the traders positive are chatters that the likely recession in some of the developed countries will be less severe than initially expected.

On the contrary, news that Australian Treasurer Jim Chalmers will convene a meeting of the country's top financial regulators to check how the latest volatility in global financial markets could affect the country, an official in the treasurer's office said on Tuesday per Reuters, prod the optimism. On the same line could be the much-debated $5.4 million Credit Default Swap (CDS) trade of Deutsche Bank. Furthermore, financial market regulators from the US and Europe also showed their dislike for the market’s curbs and raised fears of late.

Amid these plays, US Treasury bond yields struggle to extend the two-day rebound but S&P 500 Futures print mild gains at the latest.

Having witnessed the initial reaction to Australia’s inflation data, AUD/USD pair traders should pay attention to the second-tier housing numbers for fresh impetus. However, more important will be the headlines surrounding the global banking sector's health and easing fears of more rate hikes by the top-tier central banks.

Technical analysis

The AUD/USD pair’s first daily closing beyond the 21-day Exponential Moving Average (EMA), around the 0.6700 by the press time, directs buyers towards the convergence of the 50-day EMA and the previous weekly high surrounding 0.6755-60.

Additional important levels

Overview
Today last price0.671
Today Daily Change0.0001
Today Daily Change %0.01%
Today daily open0.6709
 
Trends
Daily SMA200.6671
Daily SMA500.6834
Daily SMA1000.6796
Daily SMA2000.6755
 
Levels
Previous Daily High0.671
Previous Daily Low0.6646
Previous Weekly High0.6759
Previous Weekly Low0.6625
Previous Monthly High0.7158
Previous Monthly Low0.6698
Daily Fibonacci 38.2%0.6686
Daily Fibonacci 61.8%0.6671
Daily Pivot Point S10.6666
Daily Pivot Point S20.6624
Daily Pivot Point S30.6602
Daily Pivot Point R10.6731
Daily Pivot Point R20.6753
Daily Pivot Point R30.6795

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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