AUD/USD: Aus CPI-led sell-off extends, 0.7700 tested

• Aus CPI misses expectations
• Risk-off seeps back
• Focus shifts to US durable goods

The AUD/USD pair extended its four-day losing streak on Wednesday, with the downbeat Australian inflation data-led downside gaining further traction in the European session.

AUD/USD headed to 0.7650?

The Australian dollar continues to get battered by its American counterpart so far this session, in the wake of worse-than-expected Australian Q3 CPI data, which came in well below the RBA’s 2-3% price target. Disappointing Aus CPI figures cold poured water on the RBA rate hike prospects while bolstering the central bank’s neutral bias.

Further, renewed uptick seen in Treasury yields across the curve also exacerbated the pain in the major. Rising demand for the US rates weighs down on the alternative risk currency AUD. More so, the USD bulls gear up for the US durable goods data, which could seal in a Dec Fed rate hike, bringing the monetary policy divergence back in play between the Fed and RBA. 

AUD/USD Levels to consider                                                                              

Slobodan Drvenica at Windsor Brokers Pvt Ltd. noted: “Close below 0.7732 is needed to confirm break and open way towards 200SMA (currently at 0.7692) and double-Fibonacci support at 0.7630 (Fibo 61.8% of 0.7328/0.8124 / Fibo 38.2% of 0.6825/0.8124) in extension. Broken 0.7732 pivot now acts as immediate resistance, followed by session high at 0.7783 and falling Tenkan-sen (0.7805) which is expected to cap corrective action, before bears resume.”