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AUD/USD sticks to softer Australian CPI-led losses, flirts with 0.6600 despite weaker USD

  • AUD/USD drops to its lowest level since mid-March in reaction to softer domestic CPI print.
  • The emergence of fresh USD selling lends some support to the major and helps limit losses.
  • Traders now look forward to the US Durable Goods Orders data for short-term opportunities.

The AUD/USD pair adds to the previous day's heavy losses and remains under some selling pressure for the second successive day on Wednesday. The pair maintains its offered tone through the first half of the European session and is currently placed around the 0.6600 mark, or its lowest level since mid-March.

The Australian Dollar (AUD) weakens across the board after the Australian Bureau of Statistics reported that the headline CPI eased from 1.9% to 1.4% during the March quarter, marking the smallest increase since late 2021. Furthermore, the annual CPI decelerated to 7.0% from 7.8% and suggests that inflation might have finally peaked. Adding to this, the softer core CPI eases pressure on the Reserve Bank of Australia for another hike in interest rates and drags the AUD/USD pair lower.

The US Dollar (USD), on the other hand, comes under some renewed selling pressure and erodes a major part of the overnight strong gains, which, in turn, is holding back bearish traders from placing aggressive bets around the AUD/USD pair. Fresh concerns about the regional banking sector crisis, the possibility of an imminent recession and worries about the US debt ceiling lift bets for an imminent rate cut by the Federal Reserve (Fed) later this year, which, in turn, weigh on the Greenback.

Apart from this, a modest bounce in the US equity futures exerts additional downward pressure on the safe-haven buck and contributes to limiting losses for the AUD/USD pair, at least for the time being. Nevertheless, the aforementioned fundamental still seems tilted in favour of bearish traders and supports prospects for additional losses. Hence, a subsequent fall back towards challenging the YTD low, around the 0.6570-0.6565 region, looks like a distinct possibility.

Market participants now look to the US Durable Goods Orders data, due later during the early North American session, for a fresh impetus. The focus, however, remains glued to the US Q1 GDP report on Thursday and the Core PCE Price Index - the Fed's preferred inflation gauge on Friday. The crucial US inflation data will influence the near-term USD price dynamics and help determine the next leg of a directional move for the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price0.6602
Today Daily Change-0.0024
Today Daily Change %-0.36
Today daily open0.6626
 
Trends
Daily SMA200.6702
Daily SMA500.6714
Daily SMA1000.6797
Daily SMA2000.6741
 
Levels
Previous Daily High0.6706
Previous Daily Low0.6614
Previous Weekly High0.6772
Previous Weekly Low0.6678
Previous Monthly High0.6784
Previous Monthly Low0.6564
Daily Fibonacci 38.2%0.6649
Daily Fibonacci 61.8%0.6671
Daily Pivot Point S10.6592
Daily Pivot Point S20.6558
Daily Pivot Point S30.6501
Daily Pivot Point R10.6683
Daily Pivot Point R20.674
Daily Pivot Point R30.6774

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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