AUD/USD jumps to highs above 0.78

FXStreet (Mumbai) - The Australian dollar extends its upward moves against the US counterpart in the mid-European session, surpassing 0.78 barrier, as the Aussie remains boosted on easing rate cut concerns following upbeat Aus inflation print while persistent USD weakness further adds to AUD/USD rally.

AUD/USD snaps a 3-day decline

Currently, the AUD/USD trades higher by 1.22% at fresh two day highs of 0.7807. AUD/USD extends gains and remains heavily bid, rising about 100-pips on the day as markets begin to believe that better than expected Australian CPI figures may reduce the potential for a rate cut at RBA’s May 5 policy meeting.

The CPI rose 0.2% last quarter, coming in better than the median forecast of a 0.1% rise. Australia's trimmed mean CPI - which central bankers are inclined to use - grew 2.3% last quarter, accelerating from the 2.2% rise seen in the previous quarter. The central bank targets price growth of 2-3% annually.

More so, broadly weaker US dollar with the DXY lower to the tune of -0.52% at 97.70 also contributed to upsurge in the Aussie.

On the macro economic front, markets now focus on US existing home sales data for further cues on the Aussie. While OZ business confidence numbers due tomorrow will also be closely watched.

AUD/USD Technical Levels

The pair has an immediate resistance at 0.7846 (April 21 High) levels, above which gains could be extended to 0.7886 (March 26 High)) levels. On the flip side, support is seen at 0.7787 (April 19 Low) levels from here it to 0.7755 (April 17 Low) levels.