AUD/USD reverses swiftly from the daily low

The reading was in line with market expectations and was accompanied by a higher-than-expected yearly rate, which ticked down to 6.4% from the 6.5% previous. More importantly, Core CPI, which excludes food and energy prices, came in at 0.4% MoM and 5.6% YoY.

Given that a stronger print was already priced into the markets, the USD is weakening across the board in the absence of any major surprise to the upside from the US CPI. This, in turn, is seen as a key factor pushing the AUD/USD pair higher. A generally softer tone around the equity markets seems to benefit the Greenback's relative safe-haven status and keeps a lid on any further gains for the risk-sensitive Aussie, at least for the time being. From a technical perspective, repeated failures to find acceptance above the 0.7000 mark suggest that the AUD/USD pair's recent pullback from its highest level since June 2020 is still far from being over. Hence, it will be prudent to wait for a strong follow-through buying before positioning for any further appreciating move.