AUD/USD keeps losses despite upbeat producer price inflation

• Better-than-expected Aussie producer price index (PPI) goes unnoticed.
• AUD/USD flirts with session lows, looks south.
• RBA is likely to keep the status quo until end-2018.

The lack of a healthy bounce in the AUD/USD pair despite the upbeat Aussie Q1 producer price index (PPI) underscores the bearish bias in the market.

The official data released a few minutes ago showed the inflation as measured by the PPI rose 0.5 percent quarter-on-quarter, beating the estimate of 0.4 percent, but slightly down from the previous quarter's print of 0.6 percent. Meanwhile, the annualized figure came in at 1.7 percent, beating the estimated drop to 1.2 percent by a wide margin.

However, the Aussie dollar is showing no signs of life and has recovered 10 odd pips from the session low of 0.7539. Note, the currency pair has shed close to 300 pips since April 19, leaving the daily relative strength index (RSI) closer to oversold territory (around 30.00), still the corrective bounce remains elusive.

Ahead in the day, the spot may extend losses if the US GDP prints above the estimate of 2 percent.

AUD/USD Technical Levels

A move above 0.7558 (session high) would open up upside towards the descending 5-day moving average (MA) located at 0.7575. The recovery may be extended further to 0.76 (psychological level) if the US data disappoint expectations.

Meanwhile, a dip below 0.7532 (Nov. 21 low) would expose support lined up at 0.75 (psychological level) and 0.7474 (April 11, 2017 low).