AUD/USD finds a dead cat bounce to near 0.7400 on minor ease in DXY, focus is on US CPI

• AUD/USD has sensed a nominal buying interest around 0.7400 as DXY has surrendered intraday gains.
• The uncertainty over the release of the US CPI is underpinning the ‘stay on sidelines’ approach.
• Australia’s Unemployment Rate is seen at 3.9%.

The AUD/USD pair has attracted some bids around 0.7400 after displaying a steep fall from the last week’s high at 0.7662. The pair has remained vulnerable from the previous week after the Reserve Bank of Australia (RBA) announced its monetary policy. The RBA kept its interest rate decision unchanged but dictated that price pressures would remain under observation. The asset has defended its four-day losing streak in the Asian session but may witness some turmoil after the disclosure of the US inflation by the US Bureau of Labor Statistics.

The US Statistics department is expecting a healthy jump in the US Consumer Price Index (CPI) numbers. The yearly US CPI is expected to print at 8.5%, much higher than the prior figure of 7.9%. While the yearly US CPI Ex Food & Energy is likely to land at 6.6% against the previous print of 6.4%. This is going to elevate the expectations of a 50 basis point (bps) interest rate hike by the Federal Reserve (Fed) in May sharply.

Meanwhile, the US dollar index (DXY) has surrendered its entire intraday gains after recording a high of 100.13. Considering the price action, the DXY is expected to tumble below 100.00 decisively in the European session.

On aussie front, the antipodean will report the Unemployment Rate on Thursday. The Australian Unemployment Rate is expected to land at 3.9% lower than the previous record of 4%.