The AUDUSD has traded largely in a range-bound manner for the last few months, with the dollar side of the equation and overall risk sentiment tending to dominate intra-day direction. However, a series of data updates out of the lucky country have pointed to more strength for the Aussie.
This week’s CPI has again surprised markets with a higher print, coming in at +3.8% vs the expected +3.6%, backing up last month’s strong print. Jobs numbers have also remained relatively strong, with the monthly employment change coming in almost double expectations last month and the unemployment rate dropping to 4.3%.
This put Australia in a strong position, especially when compared to other major developed countries, and has now led to the rates market pricing out cuts from the RBA into 2026. Just over a month ago, the market was strongly pricing in (98%) a 25-basis point cut from the RBA in December, and that has now shrunk to just a 4% chance. Although we have seen some good strength in the Aussie against the dollar and on the crosses in the last week, some traders feel there could be more to come.
From a technical standpoint, the AUDUSD is now sitting back in mid-range with support around the 0.6430 level and resistance up around 0.6650. As always, the USD will have a part to play in the moves in the coming weeks; however, traders are expecting the Aussie to stay ‘bid on dips’, and if we see more weakness from the US, then those resistance levels could be challenged in the coming days and weeks.
Resistance 2: 0.6706 – September High
Resistance 1: 0.6650 – Trendline Resistance
Support 1: 0.6432 – Trendline Support
Support 2: 0.6419 – November Low
