Technical Analysis – AUDUSD plummets in the US CPI aftermath

• AUDUSD drops 1.7% on hotter-than-expected US CPI data

• Violates both 50- and 200-day SMAs before finding its feet

• Momentum indicators deteriorate drastically

AUDUSD had been in a steady advance since the beginning of April, posting a fresh one-month high of 0.6643 on Tuesday. However, the pair experienced a strong decline and erased all its progress following a stronger-than-expected US inflation report on Wednesday.

Should the price extend its recent slide, the recent support of 0.6479, which also held strong in February and March, could act as the first line of defence. A violation of that territory could pave the way for the 2024 bottom of 0.6441. Dropping beneath that floor, the pair may descend towards the August 2023 low of 0.6363.

On the flipside, if the pair finds its footing and jumps back above both the 50- and 200- day simple moving averages (SMAs), the bulls could initially target the February resistance of 0.6594. Further upside attempts could cease at the recent one-month peak of 0.6643. Failing to halt there, the price may advance towards the March high of 0.6666.

In brief, AUDUSD underwent a massive retreat on Wednesday but managed to recoup some losses. Therefore, a test of the congested region that includes both its 50- and 200-day SMAs could decide whether the rebound will resume or falter.