Australian Dollar falls broadly after data showed that CPI slowed much more than expected in May. Some economists are now seeing consumer inflation, at 5.6% and around the very lower end of forecasts, being soft enough to give confidence for RBA to pause again next week. On the other hand, without any downside surprise from Canadian CPI released overnight, BoC is more likely to continue tightening next month than not.
AUD/CAD’s decline could finally be taking off with today’s selloff. Technically, further fall is expected as long as 0.8836 minor resistance holds. The whole fall from 0.9545 should target 61.8% projection of 0.9545 to 0.8781 from 0.9114 at 0.8642, or further to 0.8596 (2022 low). Nevertheless, break of 0.8836 will argue that the sentiment could have flipped again and mix up the outlook.