AUD/USD rebounds modestly, trades below 0.7150 ahead of US inflation data

• AUD/USD recovers modestly after sliding to fresh weekly lows.
• Disappointing data from Australia weighs on AUD on Wednesday.
• US Dollar Index stays quiet around 93.50 ahead of CPI data.

The AUD/USD pair closed the second straight day virtually unchanged on Tuesday and came under bearish pressure during the Asian session. After dropping to a fresh weekly low of 0.7110, however, the pair staged a rebound and was last seen posting small daily losses at 0.7137.

Eyes on Wall Street

Earlier in the day, the data from Australia showed that Westpac Consumer Confidence in August worsened from -6.1% to -9.5%. Additionally, the Wage Price Index edged lower to 0.2% on a quarterly basis in the second quarter and fell short of the market expectation of 0.3%.

Meanwhile, the S&P 500 futures are up 0.88% on a daily basis, hinting that Wall Street's main indexes could start the day sharply higher. Fresh record highs for the S&P 500 remains within a touching distance and a risk rally in the second half of the day could weigh on the safe-haven USD and help the pair push higher.

In the early American session, the Consumer Price Index (CPI) data will be featured in the US economic docket. Markets expect the annual CPI to rise to 0.8% in July. Nevertheless, the fact that the US Federal Reserve uses the Personal Consumption Expenditures Price Index as its preferred gauge of inflation suggests that the market reaction to this data is likely to be muted. At the moment, the US Dollar Index is down 0.11% on the day at 93.55.

Technical levels to watch for