AUD/USD off seven-month highs, near 0.6800 amid hot Australian CPI data
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AUD/USD renewes seven-month highs above 0.6800 after Australian CPI cools less than expected.
The US Dollar recovers as risk sentiment deteriorates ahead of Fedspeak and Nvidia earnings report.
AUD/USD daily technical setup points to more gains in the offing in the near term.
AUD/USD is paring back gains to trade near 0.6800 in Asian trading on Wednesday, having reversed a spike to a new seven-month high of 0.6813.
AUD/USD cheers Australian CPI data
The Aussie pair caught a fresh bid wave and recaptured the 0.6800 barrier following the Australian monthly Consumer Price Index (CPI) data release.
The inflation data showed that consumer prices in Australia cooled at a slower pace than expected in July, reporting a 3.5% YoY growth when compared to a 3.4% increase estimated and June’s 3.8% acceleration.
Hot Australian inflation data re-kindled expectations of further interest-rate hikes from the Reserve Bank of Australia (RBA), fuelling a fresh leg up in the Aussie Dollar (AUD).
However, a risk-averse market environment limited the upside in the higher-yielding Aussie while lifting the haven demand for the US Dollar (USD).
Markets are anxious heading into the much-awaited US AI giant’s, Nvidia. Earning reports, leading to a decline in the global stocks. Traders also await a slew of speeches from the US Federal Reserve (Fed) official for fresh cues on the magnitude of the upcoming rate cut in September.
Looking ahead, the pair will remain at the mercy of the Fedspeak-driven USD price action and the broader market sentiment, gearing up for Thursday’s Australian Private Capex data for the second quarter.
Technically, AUD/USD remains poised for more upside, as the 14-day Relative Strength Index (RSI) points north above the 50 level while just beneath the overbought region, currently near 67. Further, a couple of bullish crossovers on the daily time frame also add credence to the constructive outlook for the Aussie.
AUD/USD: Daily chart
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