FxWirePro: AUD/USD firms as US dollar rally fades

•  AUD/USD firmed on Thursday as the U.S. dollar’s rally lost steam and traders trimmed expectations for rate cuts in Australia following a stronger-than-expected inflation reading.

• The August CPI report highlighted potential upside risks to third-quarter inflation, though the RBA has downplayed the series’ importance.

• Markets no longer expect a cut next week and have trimmed November rate cut bets to 40%, compared with 70% only days earlier.

• Investor focus has now shifted to Friday’s release of the U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation.

• The data will be closely scrutinized for clues on the timing and scale of future Fed interest rate cuts.

•  Immediate resistance is located at 0.6590(SMA 20), any close above will push the pair towards 0.6692(23.6%fib)

•  Support is seen at 0.6542(38.2%fib) and break below could take the pair towards 0.6499(Lower BB).

 Recommendation: Good to sell   around 0.6600 with stop loss of 0.6750 and target price of 0.6520