AUDUSD seems vulnerable near weekly low, around 0.6400 as traders await US CPI

• AUDUSD remains under some selling pressure for the second successive day on Thursday.
• A less hawkish RBA weighs on the Aussie amid the emergence of some USD dip-buying.
• Investors now look forward to the key US CPI report before placing fresh directional bets.

The AUDUSD pair extends this week's pullback from mid-0.6500s, or its highest level since September 23 and remains under some selling pressure for the second straight day on Thursday. Spot prices hit a fresh weekly high during the first half of the European session, with bears now awaiting sustained weakness below the 0.6400 round figure.

The Australian Dollar is undermined by the fact that the Reserve Bank of Australia (RBA) has already downshifted its rate-hiking regime to 25 bps. Moreover, RBA Deputy Governor Michele Bullock noted on Wednesday that there are good reasons to think we are approaching the peak of inflation. This, in turn, suggests that the Australian central bank could further slow the pace of its policy tightening, which, in turn, continues to weigh on the AUDUSD pair.

The US Dollar, on the other hand, attracts some dip-buying and looks to build on the overnight goodish rebound from a multi-week low. This is seen as another factor exerting some downward pressure on the AUDUSD pair. That said, retreating US Treasury bond yields, along with a generally positive risk tone, might cap the safe-haven buck and offer some support to the risk-sensitive. Traders might also prefer to wait for the crucial US consumer inflation figures.

The headline US CPI is expected to ease to the 8% YoY rate in October from last month’s reading of 8.2%. An upside surprise will revive bets for faster interest rate hikes by the Fed and boost the US currency, setting the stage for a further near-term depreciating move for the AUDUSD pair. Hence, any attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Technical levels to watch