AUD/USD jumps to fresh daily high, around 0.7180 region post-US CPI report

• AUD/USD jumped to a fresh daily low in reaction to the US consumer inflation figures.
• The USD witnessed a typical "buy the rumour, sell the news" kind of a trade post-data.
• The risk-on mood further benefitted the perceived riskier aussie and remained supportive.

The AUD/USD pair gained some positive traction during the early North American session and shot a fresh daily high, around the 0.7180 region following the release of US consumer inflation figures.

The headline US CPI rose 0.8% MoM in November as against 0.7% anticipated and the yearly rate accelerated from 6.2% in October to 6.9%, marking the highest level since 1982. Adding to this, core inflation, which excludes food and energy prices, rose 0.5% MoM and 4.9% from a year ago, matching consensus estimates. The data reaffirmed expectations that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation.

Given that investors have been pricing in the prospects for a faster policy tightening by the Fed, the US dollar witnessed a typical "buy the rumour, sell the news" kind of trade and weakened a bit. This, along with a generally positive tone around the equity markets, benefitted the perceived riskier aussie and provided a modest lift to the AUD/USD pair. That said, any meaningful positive move still seems elusive, warranting some caution for bullish traders.

As investors digest the latest macro data, the focus now shifts to the upcoming FOMC monetary policy meeting on December 14-15. Heading into the big central bank event risk, investors might refrain from placing aggressive bets. Nevertheless, the AUD/USD pair remains on track to end the week on a positive note and snap five successive weeks of the losing streak.

Technical levels to watch