FxWirePro: AUD/USD firms on hotter than expected inflation reading

•  AUD/USD firmed on Wednesday after hotter-than-expected headline CPI readings dampened expectations of aggressive monetary easing by the Reserve Bank of Australia (RBA).

• Australian consumer prices rose in August at the fastest annual pace in a year, but softer core inflation kept alive prospects for another RBA rate cut.

• Data from the Australian Bureau of Statistics on Wednesday showed the monthly consumer price index (CPI) rose 3.0% in August from a year earlier, up from 2.8% in July and slightly above forecasts of 2.9%, with the uptick largely driven by base effects.

• Australia’s trimmed mean inflation slowed to 2.6% in August from 2.7% in July, but the gauge excluding volatile items and holiday travel quickened to 3.4% from 3.2%.

• At GMT 04:40, the Australian dollar was up  0.32% to 0.6220 against the US dollar.

•  Immediate resistance is located at 0.6624(Sep 24th high), any close above will push the pair towards 0.6692(23.6%fib)

•  Support is seen at 0.6590(SMA 20) and break below could take the pair towards 0.6548(38.2%fib).

 Recommendation: Good to sell   around 0.6650 with stop loss of 0.6740 and target price of 0.6580