Aussie dollar traders are preparing for a busy morning today, with key inflation data due out early in the trading session. Despite a rate cut from the Reserve Bank of Australia last time, the bank remains relatively hawkish compared to other major central banks and has reiterated its focus on inflation over the past few months. A weaker jobs report last week has fueled hopes for further rate cuts sooner rather than later for Australian households. However, inflation must cool for those hopes to materialize.
The expectation is for the headline data to show that year-on-year inflation remains relatively strong at 2.5%, which would likely keep the RBA on its current path. However, any significant deviation (+/- 0.2%) from this result could shift expectations and trigger substantial moves in the Aussie. The AUD/USD is sitting around the 0.63 mark this morning, and an off-expectation print could see technical levels on both sides of the range challenged swiftly. A stronger-than-expected reading could test trendline resistance on the hourly chart, currently around 0.6360, with recent highs near 0.6400 as the next topside level. Conversely, a weaker print indicating slowing inflation could see trendline support around 0.6260 tested relatively quickly.
Resistance Levels:
- Resistance 2: 0.6408 – 2025 High
- Resistance 1: 0.6364 – Trendline Resistance
Support Levels:
- Support 1: 0.6261 – Trendline Support
- Support 2: 0.6185 – March Low
