AUD/USD surges towards 0.7500 after mixed US inflation data

• The Australian dollar found support around 0.7400 and is trimming four-day losses.
• Geopolitics, US mixed inflation report, and falling US bond yields lifted the AUD/USD.
• AUD/USD Price Forecast: After reclaiming the 0.7441, opened the door for a re-test of 0.7500.

AUD/USD snaps four days of consecutive losses, advances some 0.91% in the North American session amidst a mixed market mood, courtesy of geopolitics jitters, elevated inflation, high US T-bond yields, and mixed economic data. At the time of writing, the AUD/USD is trading at 0.7491.

Global equities have traded mixed. Europen stocks drop, contrarily to US equities rising, as US inflation figures were reported. The Consumer Price Index (CPI) for March in the US rose to 8.5% y/y, higher than the 8.4% expected, a level last seen in 1981. Meanwhile, the so-called Core CPI increased by 6.5%, lower than the 6.7% y/y foreseen, a signal that inflation could be peaking, as shown by monthly figures.

The monthly readings missed expectations, with CPI expanding by 1.2%, higher than the 1% estimations, while Core CPI came at 0.3%, lower than the 0.6%. The market’s initial reaction was that the greenback fell below the 100.000 mark, US Treasuries edged lower and US stocks rallied,  as investors assessed that March’s reading could be the peak of US inflation.

Meanwhile, the AUD/USD lifted from 0.7460s to the 0.7490 area, as the appetite for riskier assets, increased.

Elsewhere, money market futures keep their aggressive bets that the Federal Reserve would hike 0.50% at its next meeting. The odds show a 94% chance that the Federal Reserve would lift the Federal Funds Rate (FFR) to 1% by May.

The Australian docket featured the NAB Business Confidence, which came at 16, higher than its previous reading, while Business Conditions also improved, as the index rose by 18 vs. 9 on the last figure.

AUD/USD Price Forecast: Technical outlook

The AUD/USD fell below March 7 0.7441 daily high and achieved a daily close around 0.7414, which would expose the pair to the 0.7400-41 area. However, mixed US economic data lifted the Aussie above the former and is aiming towards the 0.7500 mark, so the AUD/USD bias remains upwards.

The AUD/USD first resistance would be 0.7500. Once cleared, the next resistance would be the 0.7540-55 area, the confluence of March 28 and October 2021 cycle highs, followed by the 0.7600 mark.