Anna 
The Australian Dollar witnessed a notable reversal on Wednesday, as higher-than-expected US inflation levels reinforced the Federal Reserve’s commitment to maintaining interest rates at elevated levels, leading to a downturn in riskier assets such as the Aussie.
In March, consumer inflation in the US accelerated, with headline figures surging to 0.4%, surpassing expectations of a 0.3% reading. Year-on-year, consumer prices rose at a pace of 3.5%, up from 3.2% in February. Core inflation also saw an uptick, rising to 0.4% from the previous month’s 0.3%, while the annual rate remained steady at 3.8%.
These inflation levels underscore the Fed’s ongoing efforts to steer inflation towards their 2% target, effectively dispelling market expectations of three rate cuts in 2024, starting as early as June.
The release of the Fed’s monetary policy minutes later today will be scrutinized in light of the CPI data, providing further insights into the central bank’s stance. Additionally, Friday’s Producer Price Index (PPI) data will offer additional clarity on the inflationary landscape. Attention will also be drawn to remarks from Fed members Bostic and Williams, both known for their hawkish inclinations, which could influence investor sentiment.
From a technical perspective, the outlook for the pair appears increasingly bearish, with the potential for a strong negative candle today. Support levels are seen around the 0.6480-0.6500 range, with a significant downside target at 0.6445. Resistance levels to monitor include 0.6550 and 0.6635. Traders are advised to monitor these levels closely for potential shifts in momentum.
