AUD/USD remains bid above 0.80 handle despite weak Aussie import price index

AUD/USD remains well bid above 0.80 handle even though the Aussie data released today showed the imported inflation dropped in the second quarter. 

The Aussie import price index dropped 0.1% quarter-on-quarter vs. 0.7% expected and 1.2% previous. The export price index dropped 5.7%, which was slightly better than the 6.3% drop expected by the markets. 

The drop in the imported inflation comes a day after the Aussie quarterly CPI printed below the consensus estimates. The weak inflation will provide more room for the RBA to avoid raising rates in line with its global peers. 

Broad based USD sell-off pushed the Aussie above 0.80 cents

OzForex Research says, “Led by Iron Ore, the AUD rebounded to above the 0.79 level before the Federal Reserves’ comments sparked a broad sell-off of the USD and sent the Aussie even higher to finally pierce the 0.8 mark.”

AUD/USD Technicals

The currency pair was last seen trading at the session high of 0.8028 levels. Jim Langlands, from FX Charts writes, “The weekly charts suggest that at some stage we are in for a stronger test of the topside although the 200 WMA is currently providing strong resistance. A monthly close (Monday) above the 100 MMA (0.7975) would reinforce that view, and once above 0.8015 there is little to stop the AUD from heading to 0.8160. On the downside, the 100 MMA may act as a near term magnate, below which there is minor support 0.7940 and again at 0.7900, ahead of the minor double bottom at 0.7875.”