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AUD/USD below 0.77 handle on dismal CPI data, could test 0.7550

FX:AUDUSD   Australian Dollar/U.S. Dollar
221 0 11
AUD/USD             dived around 100-pips in a knee-jerk reaction to dismal Australian CPI             report.

Data released earlier today showed Australia’s Q1 headline CPI             figures at -0.2% q/q versus +0.2% expected and +0.4% previous.

The trimmed mean CPI             stood at +0.2% versus +0.5% expected and against +0.6% last.

Poor inflation data raised chances of a rate cut at RBA May 3rd meet, chances for a rate cut by the RBA in May stand at 49% probability vs 16% before the CPI             .

The pair went crashing further below 0.77 handle. Is holding minor support at 0.7631, techs biased lower. Downside bias could see test of 0.7525 (rising trendline) and then 0.75 levels.

The pair finds immediate support at 0.7631 (April 18th lows), while resistance is seen at 0.7708 (5-DMA).

Liquidity is likely to be low until the FOMC . USD remains on the back foot ahead of the FOMC and weaker USD likely to provide broad support to commodity markets.

Good to sell rallies around 0.7640/50, SL: 0.77, TP: 0.7620/0.76/0.7580/0.7525
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