AUD/USD dips below 0.79 handle, Aussie 10-yr yield trims gains on CPI miss

The Aussie 10-year bond yield trimmed gains to trade around 2.73% and the AUD/USD dipped below 0.79 handle after the Australia consumer prices rose less than expected. 

The consumer price index (CPI) printed at 0.2% q/q vs. 0.4% expected. The annualised figure also came-in lower-than-expected at 1.9%. Consequently, the 10-year Aussie bond yield dipped to 2.72% from 2.8%. The AUD/USD followed suit and fell to a session low of 0.7892. 

The losses have been moderate as the RBA’s trimmed mean CPI matched estimates. Furthermore, the rally in copper is helping AUD avoid a break below 0.7889 (23.6% Fib R of 0.7571-0.7988). 

Eyes Lowe speech

"Given the surging Aussie dollar complicates the post mining boom economic rebalancing act, one could only expect Governor Lowe to lean against the current market view", says Stephen Innes from MarketPulse. 

AUD/USD Technicals

FXStreet Chief Analyst Valeria Bednarik says, "Technically, the pair presents a  neutral-to-bullish stance short--term, as in the 4 hours chart,  technical indicators remain flat above their mid-lines, whilst the price settled a few pips above a still horizontal 20 SMA. Friday's low in the 0.7870 region is still a key support and the risk will remain towards the upside as long as the price holds above it, while a break above 0.7986, last week's and this year high, is the level to break to see the pair accelerating north."