The AUD/USD pair slipped 0.28% to around 0.6900 in European trading on Wednesday, marking its lowest level in more than two months. The decline reflects a strengthening U.S. dollar, bolstered by expectations that the Federal Reserve may implement at least one rate increase before year‑end.
At press time, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.17% to near 101.57.
CME FedWatch data indicates an approximately 86% probability that the Fed will enact at least one rate hike before the end of the year.
In recent months, both headline and core CPI have posted upward momentum, reinforcing hawkish Fed expectations.
In contrast, the Australian dollar has weakened following the release of May’s mixed CPI data. Headline inflation eased to 4.0% YoY from 4.2%, below the 4.4% forecast, while core CPI rose 3.6% YoY, exceeding the 3.5% consensus and the previous 3.4% reading.
AUD/USD technical analysis
AUD/USD is trading lower near 0.6900, reinforcing a bearish short‑term bias as price remains beneath the 10‑day exponential moving average (EMA) at 0.6993.
The pair continues to trade beneath this short‑term indicator, implying that rallies may encounter selling pressure, while the Relative Strength Index (RSI) at 27 stays in oversold territory, indicating stretched downside momentum.
On the upside, the initial resistance sits at the 10‑day EMA around 0.6993; a daily close above this level would be required to alleviate the prevailing bearish tone. Downside, the pair could extend its decline toward the March 30 trough at 0.6833.
This technical analysis was prepared with the assistance of an AI tool.
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), published monthly by the Australian Bureau of Statistics, tracks changes in the price of a broad basket of goods and services purchased by households. It serves as the headline gauge of inflation, following a recent methodological shift to monthly releases beginning with April 2024 data. The YoY figure compares price levels in the reference month to those of the same month in the prior year; a higher reading is bullish for the Australian dollar (AUD), whereas a lower reading is bearish.
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