By Justin McQueen AUD/USD running out of steam into 0.7200 again, this time with a bit of help from a softer Q1 CPI print. Trimmed mean came in at 0.8% vs. 0.9% expected, which has nudged the Reserve Bank of Australia’s pricing a touch lower, but a May hike is still very much alive. On the crosses, AUD stays bid, with AUD/NZD remaining the cleanest way to play this.

The topside struggle against the USD makes sense when you look around as copper's gone quiet, while the yuan has done very little, and right now there is no commodity or China FX tailwind to push the button on AUD/USD breaking higher.

Technically, it has slipped through the 200-hour MA cluster which keeps 0.7100-15 in play on the downside. That's the level to watch.

Though on balance, given the RBA is on course to raise rates next week, the AUD will remain the highest yielder in G10. In turn, the currency should continue to elicit carry support, meaning pullbacks are likely stay shallow as long as risk sentiment holds a constructive tone.
AUD pricing


Justin McQueen is a Reuters market analyst. (The views expressed are his own) ((Email: ))