AUD/USD recovers around 50-pips from disappointing CPI-led slide

The AUD/USD pair has managed to recovery around 50-pips from session low touched in the aftermath of disappointing Australian CPI print.

Currently trading around 0.7560-65 band, market seems to have digested lower-than-expected Australian CPI numbers, which fueled expectations of further RBA monetary easing in case of further deterioration in the economic conditions.

A fresh bout of greenback selling pressure during early NA session, with the key US Dollar Index dropping back below 100.00 psychological mark, seems to be the only factor supporting the pair's recovery move. 

The pair otherwise could have extended its downward trajectory amid prevalent bearish sentiment around commodity space, especially copper, which tends to dent demand for commodity-linked currencies - like the Aussie.

With an empty US economic docket, and a scheduled bank holiday in Australia on Thursday, the pair would at the mercy of USD price-dynamics and action around the US treasury bond yields. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "The spinning top formation followed by a weak Q4 inflation data release today has opened doors for a retreat to 0.75 handle. A daily close below 0.75 would signal a short-term top is in place at 0.7609 (Monday’s high) and could yield a much deeper retracement to 0.7430 (Dec 12 low)."

He further writes, "The short-term moving averages - 5MA & 10MA - are still sloping upwards, while there is a strong support around 0.75 levels (100-DMA and 200-DMA). Thus, bears need to watch out for a rebound from 0.75 levels. On the higher side, a daily close above 0.7609 would signal continuation of the rally from the December low of 0.7160."