AUD/USD pauses after initial reaction to US data

The AUD/USD pair was able to rise around 10 pips following the disappointing data from the United States. As of writing, the pair was up 0.2% on the day at 0.7580.

The Labor Department on Friday announced that Consumer Price Index dropped (-0.3%) for the first time since February 2016. The recent statements by from FOMC members have been highlighting that the inflation had still room to grow before reaching the 2% target rate. Today's data suggests that the Fed wouldn't be in a rush to hike rates.

Furthermore, U.S. retail sales fell for a second straight month in March, reflecting a weak consumer spending. On the other hand, the U.S. economy remains near full employment, making it possible for the Fed to hike rates in June. Additionally, the low inflation numbers are caused by the declining energy prices and with oil rising since the beginning of April, the negative impact on the inflation could fade away in April.

Technical outlook 

The pair is likely to stay in a tight range for the hours to come as the market thins out amid Easter holiday. To the upside, the first hurdle is aligned at 0.7585 (20-DMA) followed by 0.7620 (50-DMA) and 0.7680 (Mar. 30 high). On the flip side, supports could be seen at 0.7550 (200-DMA), 0.7500 (psychological level) and finally 0.7470 (Apr. 12 low).