The Aussie dollar fell to new multi-week low at 0.7027 in Asia on Wednesday, down nearly 1% for the session after release of Australian inflation data.
Q1 CPI miss (q/q 0.0% vs 0.2% f/c, y/y 1.3% vs 1.5% f/c) increases risk of RBA rate cut in the next policy meeting in May and weighs on Aussie, along with rise of Us dollar.
Today’s bearish acceleration marked over 76.4% retracement of bear-leg from 0.7205 (17 Apr high) and approached key support at 0.70 (8 Mar low / 50% retracement of 0.6706/0.7295 / psychological support) where strong bids can be expected.
Firm bearish setup of daily techs is supportive for further weakness, but oversold conditions suggest that bears may take a breather before attacking 0.70 support.
Broken base of thickening daily cloud (after cloud twisted on Monday), lays at 0.7090 and is expected to limit upticks and keep bears intact.
Res: 0.7080, 0.7090, 0.7116, 0.7137
Sup: 0.7027, 0.7000, 0.6955, 0.6925