The CPI rose 0.6% in the March quarter 2014, compared with a rise of 0.8% in the December quarter 2013. It rose 2.9% through the year to the March quarter 2014, compared with a rise of 2.7% through the year to the December quarter 2013. CPI in Australia rose less than expected in Q1 mainly due to the slowing in tradable and non-tradable inflation. Non-tradable inflation slowed despite the seasonal rise in education related expenses at the start of the school year. The lower-than-expected CPI in Q1 is a surprise. Just one of the 16 economists in an MNI poll expected headline CPI y/y to be lower than +2.9% and none expected the y/y average of underlying inflation to be below +2.7%.

Technical view- Forecast

The pair is drifting immediately to 0.9295 levels, we expect it will extend its fall to 0.9251 levels. In the daily charts, RSI is still in the bear mode. On the upside, the pair has strong resistance at 0.9448 levels. The near support levels exist at 0.9280, 0.9268, 0.9261, and 0.9251 levels. A day close below 0.9251 (200EMA, daily), the second bear phase will starts towards 0.92 and 0.9154 levels.