FxWirePro: AUD/USD dips below 0.79 handle on on CPI miss, bias lower, stay short

• Aussie came under pressure in the Asian session after CPI data missed expectations.
• AUD/USD slipped below the 0.79 handle to hit session lows at 0.7891.
• The consumer price index (CPI) printed at 0.2% q/q vs. 0.4% expected. The annualised figure also came-in lower-than-expected at 1.9%.
• Losses have been pared as the RBA’s trimmed mean CPI matched estimates. Also, the rally in copper which clocked a 26-month high supporting AUD.
• We have evidenced 'Bearish RSI divergence' on the 4-hourly charts which raises scope for downside.
• Upside finds major resistance at weekly 200-SMA at 0.8007, bullishness only on break above.
• Momentum indicators on daily charts are at overbought levels and are showing a turn lower.
• Focus now on FOMC decision which will decide future price movement.

Support levels - 0.79, 0.7842 (23.6% Fib retrace of 0.73712 to 0.79878 rally), 0.7746 (20-DMA)

Resistance levels - 0.7967 (July 24 high), 0.7987 (July 20 high), 0.8007 (weekly 200-SMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-Bearish-RSI-divergence-raises-scope-for-downside-in-AUD-USD-good-to-go-short-on-rallies-818327) has hit TP1.

Recommendation: Bias lower. Book partial profits, hold for downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -74.9651 (Slightly Bearish), while Hourly USD Spot Index was at 15.0788 (Neutral) at 1000 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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