AUD/USD climbs to near two-month high, beyond 100-DMA/0.7300 mark amid weaker USD

• AUD/USD scaled higher for the third straight day and shot to a near two-month high on Thursday.
• The post-US CPI USD selling remained unabated and was seen as a key factor fueling the momentum.
• Technical buying above 100-DMA and a sustained strength beyond the 0.7300 mark favour bulls.

The USD witnessed some selling during the early European session and pushed the AUD/USD pair to a near two-month high, further beyond the 0.7300 mark in the last hour.

The pair gained some follow-through traction for the third successive day on Thursday and built on the previous day's breakout momentum through the 0.7270-75 horizontal resistance. This also marked the fourth day of a positive move in the previous five and was sponsored by the post-US CPI broad-based US dollar selling.

Data released on Wednesday showed that the headline US CPI surged to the highest level since June 1982 and core CPI registered the biggest advance since 1991. The stronger readings reinforced the need for quicker interest rate hikes, though was not deemed worrying enough to change the Fed's already hawkish outlook.

Moreover, the markets had fully priced in an eventual Fed lift-off in March. This, in turn, prompted aggressive USD long-unwinding trade, which extended through the first half of the trading on Thursday. Even rebounding US Treasury bond yields and a softer risk tone did little to lend any support to the safe-haven USD.

Meanwhile, the latest leg up could further be attributed to some technical buying above the 100-day SMA. A subsequent strength beyond the 0.7300 mark might have already set the stage for additional gains. That said, the cautious mood could act as a headwind for the perceived riskier aussie and cap gains for the AUD/USD pair.

Market participants now look forward to the US economic docket, featuring the Producer Price Index and Weekly Initial Jobless Claims. This, along with Fed Governor Lael Brainard's testimony on her nomination as Vice Chair and the broader market risk sentiment, will influence the USD and provide a fresh impetus to the AUD/USD pair.

Technical level to watch