AUD/USD extends disappointing CPI-led sharp slide

The AUD/USD pair remained under heavy selling pressure on Wednesday, thanks to disappointing quarterly CPI print, and has now dropped to fresh session low near 0.7530-35 band. 

Official CPI data released on Wednesday showed Australian CPI rose 0.5% in the final three months of 2016, less-than 0.7% expected, taking the annualized rate to 1.5% as compared to 1.3% recorded previously and 1.6% expected. Meanwhile, RBA's ‘trimmed mean’ came-in at 0.4% q/q, again below market estimates of 0.5%. 

Today's downbeat CPI release fueled some speculations of further monetary easing by the RBA, should the economic condition deteriorate. With the US Federal Reserve still expected to be on course to further raise interest-rates this year, diverging monetary policies attracted some fresh selling pressure around the higher-yielding currency - Aussie. 

In absence of any major market moving releases from the US, lingering concerns over the US President Donald Trump’s protectionist stance and lack of clarity over his fiscal stimulus plans seems be the only factor providing some respite for bulls.

Technical levels to watch

Immediate downside support is pegged near 0.7520-15 region below which the pair is likely to head towards retesting 200-day SMA support near 0.75 psychological mark, en-route 0.7480-75 horizontal support. 

On the upside, 0.7555-60 area now seems to act as immediate resistance and is closely followed by resistance near 0.7580 region. A convincing move above 0.7580 resistance would negate any near-term bearish bias and lift the pair beyond 0.7600 handle towards its next major hurdle near 0.7650 area.