- 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.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest
