AUD/USD rebounds from CPI led slide but downside risks remain

Much earlier today, at the start of the Asian trading session, Australia released its latest (December) Consumer Price inflation data and it was at or below expectations. The reading for Q4 fell to 2.4%, from 2.8%. The markets had forecast that at 2.5%. The immediate reaction saw the AUD/USD and AUD/JPY fall. The AUD/USD had closed in the US last night at 0.6253. It dropped to 0.6227 earlier, but it has rebounded off that low now. The longer term price action continues to see the AUD/USD remain under pressure, after falling from a high at the end September last year, at 0.6912. The low since then has been set at 0.6131 on January 13. The most recent high since that low, at 0.6331 stalled right on a major trend line resistance point. All the while that trend line caps the topside the outlook will remain uncertain. This CPI data today has certainly added to the prospect the RBA will further reduce their current OCR (4.35%), when they next meet on February 18. The AUD/USD is currently trading at 0.6245