AUD Stumbles as Hot Inflation Print Meets Stronger US Dollar

The Australian Dollar stumbled on Wednesday after Australia's hot inflation print ran into a stronger US Dollar. The monthly Consumer Price Index (CPI) rose 1% in July, exceeding the forecast of 0.8%, and pushing the annual rate to 3.5%. The trimmed mean measure of the Reserve Bank of Australia's preferred core gauge increased 0.5% on the month and remained at 3.6% YoY, above the predicted 3.5%.

The US Dollar received support from its own inflation data. Annual Personal Consumption Expenditure (PCE) inflation, the Federal Reserve's preferred measure, held steady at 3.7%, while the core PCE Price Index stayed at 3.3% as expected. Both rose 0.2% on the month.

The AUD/USD pair is trading around 0.7170 and maintains a bullish tone above both the 20-period Simple Moving Average (SMA) at 0.7164 and the longer-term 100-period SMA at 0.7090. The Relative Strength Index (RSI) around 60 stays in positive territory, indicating that upside momentum is present but not overbought.

Immediate resistance for the AUD/USD pair appears at 0.7175, followed by the recent cap around 0.7188. Initial support is clustered at 0.7168, reinforced by the 20-period SMA and the horizontal level at 0.7160, before a deeper structural floor emerges at the 100-period SMA near 0.7090.