AUD/USD: robust despite poor second tier CPI readings in Australia

AUD/USD is slightly bid on a 10 pip bounce, despite the Melbourne Institute inflation reading coming in the worse since 2003.

AUD/USD continues to ride the weak greenback and nonfarm payrolls shocker, despite CPI inflation estimates from the Melbourne Institute coming in with year-over-year readings the lowest since the series began at +1.0% vs prior 1.5%.  Month on month, -0.2% vs +0.1% m/m prior and the data will be a concern to the RBA meeting tomorrow. The RBA are widely expected to remain on hold considering the recent GDP data beating expectations, while a dovish statement might be otherwise expected, especially in the recent events surrounding the bearish outlook for the US dollar. We will have Yellen making remarks in the U.S. shift and then later in the week, Chinese CPI. Markets are open in China and positively since the lowest since 2010 nonfarm payrolls on Friday.

AUD/USD levels

Having rallied through the 23.6% retracement at 0.7308 in a continuation of this near-term reversal taking place, the next key resistance to beat is at the highs of this post US jobs report rally at 0.7360 for a subsequent rally towards the 0.7430 zone and 4th May consolidation zone. 

Valeria Bednarik, chief analyst at FXStreet suggests that an interim bottom has been reached, and opening doors for further gains, should the mentioned support hold. "Technical indicators in the head sharply higher, supporting a continued advance, while in the 4 hours chart, the technical indicators have lost upward strength within extreme overbought territory, but hold ground, in line with the longer term perspective."