AUD/USD extends post-Aussie CPI downfall, plummets to over 3-month lows

   •  Tumbles to over 3-month lows on softer Aussie CPI
   •  Surging US bond yields aggravate selling pressure
   •  US durable goods order next

The AUD/USD pair extended softer Australian CPI-led downfall and dropped to over 3-month lows during early European session on Wednesday.

Accelerates downslide after Q3 CPI

The pair traded with a bearish bias for the fourth consecutive session and accelerated the slide after Australia reported Q3 inflation figures. In fact, the headline CPI came in at 0.6% q/q vs. 0.8% expected, while the annualized rate eased to 1.8% from 1.9%.

   •  Australia: Soft CPI supports ongoing neutral RBA tone - TDS

Surging US bond yields add to the selling pressure

Adding to this, a strong follow-through upsurge in the US Treasury bond yields, though failed to provide any fresh bullish impetus to the US Dollar, was further seen driving flows away from higher-yielding currencies - like the Aussie. 

Meanwhile, a mildly negative tone around commodity space, especially copper, also did little to lend any support to commodity-linked currencies and stall the pair's slump to its lowest level since mid-July. 

Later during the NA session, the US macro data - durable goods orders, would now be looked upon for some fresh impetus. In the meantime, the US bond yield dynamics might continue to act as a key determinant of the pair's movement. 

Technical levels to watch

Immediate support is pegged near the 0.7700 handle and is closely followed by support near the 0.7685-80 region, below which the pair could continue falling towards its next support near 0.7630 level. 

On the upside, 0.7740 level now becomes immediate resistance, which if cleared might trigger a short-covering bounce back towards the 0.7800 handle with some intermediate resistance near 0.7775 area.