As indicated by the AUD/USD chart, the Australian dollar has fallen below the 0.6680 level today, with the decline from Wednesday’s high (A) exceeding 1.1%.

Key bearish drivers include:

→ Declining inflation expectations. Data released on Wednesday showed a sharp slowdown in Australian inflation to 3.4%. This has removed the likelihood of a February rate hike by the Reserve Bank of Australia, which had previously maintained a hawkish stance.

→ Uncertainty surrounding China. The economy of Australia’s main trading partner is failing to deliver the expected strong growth, with today’s PMI data coming in mixed. This raises doubts about Chinese demand for Australian commodities and weighs on the AUD, which is often viewed as a proxy for the Chinese economy.

→ NFP-related risk aversion. Ahead of today’s US labour market report, investors are shifting into risk-reduction mode and increasing demand for so-called safe-haven US dollars amid concerns over potential negative surprises.

Technical Analysis of AUD/USD

On 26 December, we drew an ascending channel, which remained in place at the start of 2026. However, the following developments should be noted:

→ the current downward move represents a bearish breakout below the lower boundary of the channel;

→ the bullish impulse that began on 5 January (marked by the arrow) has been fully neutralised.

These signals point to a meaningful shift in market sentiment, clearly reflected in price action. Should bulls attempt to bring AUD/USD back within the ascending channel, resistance might emerge near 0.6720, where the sharp sell-off began on 8 January, highlighting the dominance of sellers.

The release of high-impact news could fuel further downside momentum, opening the way for the continuation of the descending trajectory (highlighted in red).

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