AUD/USD erase CPI-led gains, spirals back below 0.7500 level

The AUD/USD pair faded a knee-jerk bullish spike to 0.7565 and turned back sharply lower to currently trade back below 0.7500 psychological mark, around 100-day SMA region.

During early Asian trading session, the pair surged to a 6-day high level after the Australian quarterly CPI data showed a rise in the second quarter after a sharp drop recorded in the previous quarter.  CPI rose on expected line by 0.4% q-o-q as compared to previous quarter's -0.2% contraction.

The up-surge, however, was short-lived and the pair quickly turned back lower as markets remained firm over the possibilities of further interest rate-cut by the RBA.

Market participants now turn their focus to the key event risk, FOMC monetary policy decision, which would assist investors to determine the near-term trajectory for the US Dollar and eventually drive the AUD/USD major. Also watch-out for the release of US durable goods orders and pending home sales data in order to grab some short-term momentum play.

Trade July 27 Federal Reserve interest rate decision - Live Coverage

Technical levels to watch

Weakness below session low support near 0.7460-50 region seems to drag the pair immediately below 0.7400 handle support, towards 0.7370 support (June 30 low). Meanwhile on the upside, 0.7500 psychological mark now become immediate strong resistance to watch for, above which the pair could make a fresh attempt to retest session high resistance near 0.7565 area.