AUDUSD extends decline below 0.6450 as Wall Street turns negative

• The Aussie is under pressure amid risk aversion.
• The dollar rises after a losing streak of three days, pending the US CPI.
• AUDUSD falls over a hundred points from Tuesday’s high.

AUDUSD hit a fresh 2-day low during the American session as the US dollar extended gains on the back of risk aversion. It has bottomed at 0.6431. Downside pressure still persists.

Waiting for the CPI figures

On the eve of the publication of the Consumer Price Index for October in the US, the dollar gains support and rises after three days of consecutive losses. So far, the midterm elections have shown no major surprises that have limited market impact. The focus is on tomorrow’s CPI which is expected to show 8% inflation.

Earlier, on Thursday, the Melbourne Institute will publish the Survey of Consumer Inflation and Salary Expectations. Inflation expectations are expected to rise from 5.4% in October to 5.7% in November.

Short term outlook

AUDUSD weakened as Wall Street and metals turned negative on the day. US yields are now lower in a session with no clear direction. If the negative tone prevails in the markets, further losses in the pair seem likely.

On Tuesday, the AUDUSD hit its highest level in seven weeks at 0.6550. The Aussie failed to consolidate above 0.6500 and is back below 0.6450 and also below the 20 SMA on the 4 hour charts. The next support could be located at 0.6405/10.

A recovery above 0.6500 would remove bearish pressure, exposing the recent high at 0.6550, with intermediate resistance at 0.6520.

Technical levels