The euro slipped below a key level against the dollar on Wednesday, dented by profit-taking after it hit an 11-week high, while the Australian dollar fell as inflation data pared the chances of an interest rate rise next week.

The euro EUR= edged down 0.1 percent to $1.2985 EUR=, falling below the psychological, and technically crucial, level of $1.30 after it rose to a high of $1.3045 on Tuesday. The $1.30 level coincides with a 61.8 percent Fibonacci retracement of the euro's selloff since mid-April.

Near-term resistance for the euro is seen at the May 10 high of $1.3095, followed by $1.3125, which is a 38.2 percent retracement of the December-June move.

Despite the euro's easing from highs, sentiment towards the single currency remains bullish in the short term with a number of commentators surprised by the resilience of the euro zone economy. On the other hand, doubts remain over the ability of the U.S. economy to avoid a slowdown.

Chartists say a sustained break above the $1.30 level could place the euro in a new $1.30-$1.35 trading range in the coming weeks.

The euro continues to flutter about $1.30, while levels such as $1.3094 loom large as thresholds that would spark further unwinding of euro short positions, David Watt, RBC Capital Markets senior strategist, wrote in a note.

Against the yen, the euro dipped 0.3 percent to 113.97 yen EURJPY=, staying within sight of a two-month high of 114.42 yen struck on Tuesday.

Traders said the euro looked increasingly bullish on charts against the yen, especially after it rose above 113.50 yen where it had met lots of offers from Japanese exporters.

The euro is seen facing resistance in the 114.10-114.40 yen region, the neckline of an inverse head-and-shoulders pattern the pair is about to form after hitting an 8-½ year low of 107.30 yen in late June, traders said. The euro could extend its rally to the key psychological 120 yen level if it clearly breaks above that resistance, they said.

AUSSIE SLIDES AS CPI REMOVES RATE RISK

The Australian dollar slid 0.8 percent to $0.8941 AUD=D4, having dropped from a 11-week high of $0.9069 reached the previous day.

Australian consumer prices rose much less than expected last quarter while core inflation slowed to it lowest in over three years, greatly lessening the possibility of the Reserve Bank of Australia raising interest rates -- now at 4.5 percent -- at its monthly meeting on Aug. 3.

The Aussie has given back some of its recent gains as CPI data prompted investors to push back expectations for higher rates, said Ayako Sera, a market strategist at Sumitomo Trust & Banking.

But the Aussie is likely to keep drawing support from Australian interest rates, which are still the highest among industrialised countries.

The dollar slipped 0.2 percent to 87.77 yen JPY=, with patchy U.S. data continuing to weigh on the greenback.

U.S. consumer confidence for July fell to its lowest level since February, and eyes are on consumer durable goods numbers for June due later in the session to further gauge the health of the world's largest economy.

The dollar index .DXY was little changed at 82.21, with near-term support at 81.44, a 50 percent retracement of the index's move from a low of 74.17 in December 2009 to a high of 88.71 on June 7. (Additional reporting by Anirban Nag in SYDNEY; Editing by Chris Gallagher)

Inflation Down