• AU Q2 CPI undershot consensus, consistent with downside signals flagged into the release

• Markets scale back RBA tightening expectations, August hike now effectively priced out

• Follows on from Governor Bullock’s more cautious tone highlighting incomplete policy transmission of prior hikes

• AUD offered across the board, weakness most evident on crosses

• AUD/NZD preferred expression of AUD downside

• Cross has been tightly correlated with rate differentials, softer CPI shifts bias toward further retracement

• Initial support at 1.1900, clean break opens 200DMA at 1.1850

• Recent rebound rejected at 100DMA - former trend support (1.09-1.23 move) now acting as resistance

• Technical rejection reinforces bearish bias, scope for extension lower on sustained AUD pressure
AUDNZD daily


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))