• AUD/USD eased on Wednesday as investors digested a mixed Australian inflation report.
• Australian consumer prices fell in May due to lower fuel and travel costs, but stronger-than-expected core inflation kept the possibility of another RBA rate hike alive.
• Australian CPI fell 0.7% in May from April, while annual inflation slowed to 4.0% from 4.2%, according to ABS data. Both readings came in below forecasts for a 0.4% monthly decline and 4.3% annual inflation..
• The trimmed mean measure of core inflation increased by 0.4% in the month, above forecasts of 0.3%, pushing the annual pace up to 3.6%.
The Reserve Bank of Australia has hiked rates three times this year in an effort to get core inflation back into its target band of 2% to 3%.
• Immediate resistance is located at 0.6969(50%fib), any close above will push the pair towards 0.7000(Daily high).
• Support is seen at 0.6891(Lower BB) and break below could take the pair towards 0.6841(61.8%fib).
Recommendation: Good to sell around 0.6950with stop loss of 0.7000 and target price of 0.6880
