The AUD/USD pair attempted to recover from a significant decline but faced resistance near 0.6400. Following US tariff announcements, market participants are closely monitoring Australian inflation data, expected to rise by 2.6% for January.
The Reserve Bank of Australia recently reduced its cash rate, emphasising its ongoing effort against inflation. This cautious monetary policy has contributed to a careful trading environment for the Australian Dollar.
Currently, the AUD/USD is encountering solid resistance at the 100-day Simple Moving Average, with a potential for fluctuation influenced by upcoming economic data and trade developments.
The Australian Dollar struggled to gain traction after its initial recovery attempt, finding itself restricted by sellers near the 0.6400 mark. The pressure on the currency mounted following tariff decisions from the United States, which have shifted investors’ focus to domestic inflation data. January’s figure is anticipated to come in at 2.6%, a figure that will either reinforce or challenge expectations about Australia’s pricing pressures.
Philip Lowe’s team at the Reserve Bank recently opted to lower the cash rate, a move signalling a softer stance amidst concerns about economic growth. This approach reflects an effort to balance inflation management with economic stability, keeping traders keenly aware of potential shifts in monetary outlook. Markets remain watchful for any rhetoric from policymakers that could sway sentiment further.
At present, traders are observing how the Australian Dollar reacts to resistance at the 100-day Simple Moving Average. This technical barrier has proven to be a sticking point, with buyers needing stronger economic backing to push through. A weaker-than-expected inflation reading could trigger additional selling interest, whereas an elevated figure might support another retest of resistance.
Short-term direction is also linked to wider trade policies, particularly how tariff strategies unfold between major economies. Commodity-related influences, always a key factor for the Australian Dollar, will continue to affect positioning. Traders should weigh incoming data carefully, managing risk as volatility could persist in response to economic releases and external pressures.
