• Strong US CPI figures have sent the Aussie tumbling.
• US CPI accelerated 0.4% in March against expectations of a 0.3% reading. The yearly inflation jumps to 3.5% from 3.2% in the previous month
• AUD/USD is under pressure again, with support levels at 0.6480 and 0.6445 on the bears’ focus

Australian Dollar posted a strong reversal on Wednesday. The higher-than-expected US inflation levels have endorsed the Fed’s “higher for longer” stance, crushing risky assets like the Aussie.

Consumer inflation accelerated in the US in March, with the headline figures accelerating to 0.4%, against expectations of a 0.3% reading.  Year-on-year, consumer prices rose at a 3.5% pace from 3.2% in February. The Core inflation accelerated to 0.4% from 0.3% in the previous month, while the yearly rate remained steady at 3.8%.

These levels confirm that the Fed has still some work to do to push inflation towards their 2% target, and practically ditch the markets’ view of three rate cuts in 2024 starting in June.

Later today, the Fed monetary policy minutes will be looked at from a different perspective following the CPI data. On Friday the PPI will add further insight into the inflation picture, although Fed’s Bostic and Williams, both on the hawkish side of the committee, might attract investors’ attention.

The technical picture looks increasingly bearish as the pair is on track to post a strong negative candle today. The 0.6480-0.6500 area might support the pair ahead of the big downside target, 0.6445. Resistances are 0.6550 and 0.6635