AUD Rallies on Fresh Inflation Surge

CPI Spikes AgainThe Aussie Dollar has seen fresh demand across early European trading on Wednesday following the latest Aussie data overnight. CPI was seen ticking back up last quarter with the headline reading printing 1.2% from 0.8% prior, above the 1.1% the market was looking for. YoY, CPI bounced back to 5.6% from 5.2% prior, above the 5.3% the market was looking for. Finally, trimmed mean CPI QoQ rose to 1.2% from 1% prior, above the 1% the market was looking for.Hawkish RBA Risks ReturnOn the back of the RBA holding rates steady across recent meetings, the data will be a firm disappointment for the bank. Traders are now repricing their near-term RBA rate projections on the back of the data. Following the release, new RBA governor Bullock warned that the bank will not hesitate to raise rates further if the inflation outlook shifts higher over coming months. With the labour market still very strong, upward inflationary pressures remain entrenched at this point and as such, AUD looks vulnerable to further upside near-term with traders now once again pricing in hawkish RBA risks.Technical ViewsAUDUSDThe pair has been stuck in a narrow range of consolidation over recent months. While price has still been grinding lower, moves have become very laboured and with .6257 underpinning the market, along with heavy bullish divergence on momentum studies, upside risks are growing. Bulls will need to see a break above the .6520 level to affect a proper reversal and turn focus away from a continuation lower to .6195.