AUD/USD whipsaws 20 pips above 0.6600 on easy Australia inflation, US Durable Goods Orders eyed

• AUD/USD renews six-week low near 0.6600 despite mixed Aussie inflation data.
• Australia Q1 CPI crosses downbeat forecasts, RBA Trimmed Mean CPI disappoints.
• Concerns about First Republic Bank, US debt ceiling expiration exert downside pressure on risk barometer pair.
• US Durable Goods Orders, risk catalysts are the key for clear directions.

AUD/USD marks a swift move of around 20 pips while refreshing the six-week low on mostly downbeat Australian inflation data during early Wednesday. That said, the Aussie pair initially dropped to 0.6611 before recently poking 0.6630 as traders turn cautious ahead of the key US Durable Goods Orders for March.

Australia’s Monthly CPI drops to 6.1% YoY in March versus 6.6% expected and 6.8% prior, confirming policymakers’ latest claims of easing inflation pressure due to higher rates. On the same line, the Q1 CPI also eased to 1.4% QoQ from 1.9% in previous readings but crossed the 1.3% market forecasts. Further, the RBA Trimmed Mean CPI declines below 1.4% consensus and 1.7% prior to 1.2% QoQ in the first quarter (Q1).

Also read: Breaking: Australia Q1 RBA trimmed mean CPI +1.2% QoQ misses expectations

Apart from the mostly downbeat Aussie inflation data, the latest fears emanating from the First Republic Bank (FRB) and the US debt ceiling discussion also weigh on the AUD/USD prices.

On Tuesday, the FRB’s disappointing earnings reports joined the executives’ resistance in taking questions and no earnings guidance to trigger a fresh wave of banking jitters. Even so, the major central banks tried to restore market confidence by curtailing the US Dollar operations initiated during the first wave of the banking crisis. “The world's top central banks are cutting the frequency of their dollar liquidity operations with the U.S. Federal Reserve from May, sending the clearest signal yet that last month's financial market volatility is essentially over,” said Reuters.

Furthermore, US Treasury Secretary Janet Yellen warned that failure by Congress to raise the government's debt ceiling–and the resulting default–would trigger an "economic catastrophe" that would send interest rates higher for years to come, per Reuters.

It should be noted that the mostly upbeat US data also keep the AUD/USD pair sellers hopeful, especially amid the Reserve Bank of Australia’s (RBA) dovish bias. On Tuesday, US Conference Board's Consumer Confidence Index edged lower to 101.3 for April, versus 104.0 prior. Additional details of the publication stated that the Present Situation Index ticked up to 151.1 during the said month from 148.9 prior whereas the Consumer Expectations Index dropped to 68.1 from 74 previous readings. Further, the one-year consumer inflation expectations eased to 6.2% in April from 6.3% in March. In a different release, the US New Home Sales rose to 0.683M MoM in March versus 0.634 expected and 0.623M revised prior while the S&P/Case-Shiller Home Price Indices and Housing Price Index both rose past market forecast to 0.4% and 0.5% respectively for February.

It should be observed, however, that the recent gains of the S&P 500 Futures and a pause in the US Treasury bond yields’ downside prod the AUD/USD bears.

Having witnessed the initial reaction to Australia’s headline inflation numbers, the AUD/USD pair traders should closely observe the risk catalysts for clear directions ahead of the US Durable Goods Orders for March, expected to improve to 0.8% versus -1.0% prior.

Technical analysis

The AUD/USD pair’s sustained downside break of a 1.5-month-old support line, now immediate resistance near 0.6655, joins bearish MACD signals to keep the Aussie pair sellers hopeful. Even so, a one-month-old horizontal support area near 0.6620-25 challenges the immediate downside of the Aussie pair.