- AUD/USD hits three-day lows at 0.7534 after Australia core CPI printed at record lows.
- Data showed Australia core CPI fell to record low of 1.6% y/y. The ‘trimmed mean’ figure tracked by the RBA came in at 0.4% q/q, which is below the market estimate of 0.5%.
- Dismal inflation data has raised the odds of a rate cut from the RBA.
- Currently AUD/USD is holding strong support by 1H 200-SMA at 0.7534. Break below will see drag further, scope for test of 200-DMA at 0.7496.
- The pair struggled to extend gains above 0.76 handle on Tuesday's trade.
- Technicals are in overbought zone, some caution advised as we could see some correction.
- We see volumes are declining. However, MACD still signals continuation of trend and ADX supports trend higher.
- Major support levels - 0.7534 (1H 200-SMA), 0.7517 (Jan 20 low), 0.7492 (200-DMA)
- Major resistance levels - 0.7562 (5-DMA), 0.76, 0.7646 (78.6% Fib retrace of 0.7778 to 0.7160 fall), 0.77
Recommendation: Good to short break below 1H 200-SMA at 0.7534, SL: 0.7570, TP: 0.7492/ 0.7470/ 0.7450
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -103.564 (Highly bearish), while Hourly USD Spot Index was at -42.7268 (Neutral) at 0550 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
