The price of AUD/USD plunged into a free fall after failing to break its support and could not activate a reasonable recovery.
Technically, the AUD/USD price rebounds because Dollar Index retreated from its strong rally. After its massive drop, we expected the currency pair to return to test and retest the near-term resistance levels before dropping deeper. The pair was trading at 0.6733 when writing this report, and it seems determined to approach and reach at least the 0.6710 lower low.
Yesterday, the AUD/USD pair registered sharp movements in both directions after the US inflation data and after the BOC. The US CPI and the Core CPI reported higher inflation, while the Bank of Canada increased the Overnight Rate from 1.50% to 2.50%, above 2.25% expected.
Now, the price has dropped massively as the Dollar Index rallied. Fundamentally, the Australian economic data came in better than expected, but the AUD continues to fall versus the greenback. The Unemployment Rate dropped unexpectedly lower from 3.9% to 3.5%, below 3.8% expected, while the Employment Change came in at 88.4K above the 30.0K forecast.
Later, the US PPI, Core PPI, and the Unemployment Claims could bring more volatility and strong action. Tomorrow, the US retail sales data could shake the markets. Still, the USD maintains a bullish bias as the FED is expected to hike rates again in the July meeting.