AUDUSD Technical Analysis – Awaiting the US inflation report

Fundamental Overview

The USD got a short term boost recently as Trump floated reciprocal tariffs. That came after a good US NFP report where the data was mixed at best but still pointing to strength. The jump in average hourly earnings caught the eye but that might have been distorted by the drop in average weekly hours.

We’ve also got another jump in inflation expectations in the University of Michigan Consumer Sentiment survey showing that the tariffs news is the main culprit of the recent surge in expectations.

The focus now switched to the US CPI report due later today where Core inflation is expected to tick lower which would be a welcome news. A lower than expected print should see the US Dollar losing ground across the board once again, while a hot reading might boost the greenback for the rest of the week.

On the AUD side, the Australian Q4 CPI report recently missed expectations across the board with the underlying inflation figures easing further and now comfortably in the RBA’s target range on a 6-month annualised basis.

As a reminder, the RBA softened further its stance at the last policy decision as it nears the first rate cut. The market is now seeing an 84% chance of a 25 bps cut in February with a total of 75 bps of easing expected by year end.

AUDUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that AUDUSD is rejecting the key resistance zone around the 0.63 handle. This is where the sellers are stepping in with a defined risk above the resistance to position for a drop back into the 0.6170 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.65 handle next.

AUDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a minor support zone around the 0.6235 level. If the price gets there, we can expect the buyers to step in with a defined risk below the support to position for a break above the resistance. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 0.6170 level next.

AUDUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much we can add here as the sellers will keep on pushing towards the 0.6235 support, while the buyers will look for a break above the resistance. From a risk management perspective though, it would be much better to wait for the US CPI report as any technical setup can be invalidated in a blink of an eye when the data gets released. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the US CPI report. Tomorrow, we get the US PPI and the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales data.