AUD/USD advances to fresh daily high of 0.7380 after US inflation data

• AUD/USD rose sharply in the early American session.
• US Dollar Index lost its bullish momentum after US inflation data.
• Annual Core CPI in US edged lower to 4.3% in July as expected.

Following a consolidation phase around 0.7330 in the first half of the day, the AUD/USD pair rose to a daily high of 0.7380 in the early American session. As of writing, the pair was up 0.28% at 0.7370.

DXY retreats below 93.00 on Wednesday

The initial reaction to the July inflation data from the US helped AUD/USD turn north by putting the greenback under modest selling pressure.

The US Bureau of Labor Statistics announced on Wednesday that the Consumer Price Index (CPI) stayed unchanged at 5.4% on a yearly basis. Additionally, the Core CPI, which excludes volatile food and energy prices, edged lower to 4.3% from 4.5% in June as expected. The US Dollar Index (DXY), which reached its highest level since early April at 93.19, was last seen losing 0.13% at 92.94.

Breaking: US annual CPI inflation stays unchanged at 5.4% in July vs. 5.3% expected.

In the meantime, US stocks futures are up between 0.2% and 0.3% ahead of the opening bell, suggesting that the DXY could find it difficult to regain its traction in case risk flows start to dominate the markets.

Technical levels to watch for