AUD/USD: Taking cues from USD, risk sentiment – OCBC

Australian Dollar (AUD) slipped modestly in early trade after May CPI came in lower at 2.1% y/y (vs. expectations of 2.3%). AUD was last seen at 0.65 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Bearish momentum on daily chart shows signs of fading

"Trimmed mean CPI was also lower at 2.4% y/y (vs. 2.8% prior). Softer print also added to expectations for RBA to cut rates at next meeting in Jul. That said, AUD reversed the modest losses as soft USD momentum appears dominant."

"Bearish momentum on daily chart shows signs of fading while RSI rose. Resistance at 0.6550 levels. Support at 0.6485, 0.6450 levels (50 DMA). Easing of geopolitical tensions and hint of dovish tilt remains supportive of risk-sensitive AUD."