AUDUSD traded up at 0.7750, ahead of CPI release despite falling sharply in early session after Glen Stevens’ comments and the interpretation of a dovish RBA minutes. Yesterday’s reversal in prices came on the hopes of new economic stimulus from China, helping to ease the pressure of further monetary easing. Contrary to that, the latest bearish wave that is forming on the daily chart does looks likely to take the AUDUSD pair down. Any mark to 0.7500 is possible, given that the RBA does cut rates in two weeks time.
AUD/USD fell significantly after both Glenn Stevens’ comment and a dovish sounding RBA minutes. The decline had AUDUSD breaking below the 61.80% Fibonacci Retracement mark, subsequently consolidated at 0.7680. The bottom in Aussie Dollar did regained ground as price action marked on a huge reversal to turn back at the high at 0.7750. Do keep an eye on CPI figures due today as any miss in mark would ramped up an extension of weakness to 0.7700.
Holding steadily at 0.7720, candlesticks remains well under the 55 EMA, fading in and out of the 20 SMA and 200 EMA. Given the recent string of weakness, the Aussie dollar is staring down the barrel of further rate cuts as the economic slowdown in China flows on to Australia. With the Australia’s first quarter CPI due for release, traders are reminded to remain on the sidelines for the time being. Should the Aussie drifts lower, look for support to be found at 0.7670. Conversely, resistance is found at 0.7740.