AUD/USD falls to 10-day EMA as Australia's inflation slowed in Q3

• Aussie on the defensive after the release of the quarterly inflation report. 
• The slowdown in inflation was expected, hence the losses could be short-lived. 

The AUD/USD is flashing red after the release of Australia's third-quarter inflation report. 

The headline CPI in September quarter rose by 0.4 percent as expected, leaving the increase on the year earlier at 1.9 percent. The previous quarter's CPI reading was 0.5 percent.

Meanwhile, the Reserve Bank of Australia's trimmed mean CPI also slowed to 0.4 percent as expected, leaving the annualized figure at 1.8 percent - slightly lower than the estimate of 1.9 percent.

The Aussie dollar is losing altitude as of writing, likely due to a slowdown in inflation. At press time, the AUD/USD is trading below the 10-day EMA Of 0.7089, having clocked a high of 0.7107 earlier today. However, the decline could be short-lived as the drop in inflation was pretty much in line with the expectations. 

Further, the Aussie dollar may pick up a bid again if the global equity markets report gains and the Chinese manufacturing and non-manufacturing PMI numbers, due in a few minutes, paint a positive picture of the world's second-largest economy. 

Technical Levels

Resistance: 0.7160 (Oct. 17 high), 0.7171 (50-day EMA + falling trendline January highs), 0.7202 (Aug. 15 low)

Support: 0.7053 (previous day's low), 0.7021 (Friday's low), 0.70 (psychological support)