FxWirePro: AUD/USD snaps two day winning streak, upside capped at 21-EMA

AUD/USD chart - Trading View 

AUD/USD was trading 0.20% lower on the day at 0.7359 at around 10:45 GMT.

The pair snapped a two-day winning streak as bulls failed once again at 21-EMA resistance.

Despite a weaker reading, U.S. consumer price still remained at a 13-year high on a yearly basis, underpinning the Fed's argument that inflationary pressures are likely to be transitory.

While labour market recovery is an important criteria for the Fed to dial back its asset-purchase programme and raise interest rates, it considers current inflationary pressures as transitory.

Uncertainty about the Fed’s tapering plans prevent investors from placing any aggressive bets.

Focus now on the US PPI and Jobless Claims for fresh impetus. Broader market risk sentiment and UST yields will also influence price movements.

Major bias for the pair is bearish. 21-EMA is stiff resistance (currently at 0.7386), capping any recovery attempts.

Price action has retraced brief break above 200H MA. Resumption of weakness will see some strong support at 110-week EMA at 0.7308. 

Break below 110-week EMA to see drag till 200-week MA at 0.7224. Bearish invalidation only above 21-EMA.