Australian Dollar Strengthens Following Inflation Data

According to Forex Factory, Australia’s CPI index came in higher than expected: analysts had forecast an annual rate of 2.9%, while the actual figure was 3.0% (previous value: 2.8%).

This led to a strengthening of the Australian dollar, as the Reserve Bank of Australia (RBA) may adopt a more cautious stance in its monetary policy easing process (in August it cut the cash rate from 3.85% to 3.60%, following a peak of 4.35% in 2024).

On the other hand, traders are weighing the impact of yesterday’s remarks from the Chair of the Federal Reserve, who adopted a cautious tone. According to Powell, the Fed must strike a balance between persistent inflation and a weakening labour market, describing the situation as “challenging”.

AUD/USD Technical Analysis

Since the end of last month, AUD/USD has been trading within an ascending channel (shown in blue).

From a bearish perspective:
→ the AUD/USD chart shows signs of aggressive selling above the 0.66700 level — the price fell on wide candlesticks with long upper wicks;
→ if the move from A→B is considered the dominant impulse, the current rise in AUD/USD appears to be an interim recovery — resistance may come from the 50% level and other Fibonacci retracement levels;
→ as shown in red, the chart provides (albeit not very clear) grounds for constructing a descending channel. It is possible that its upper boundary could act as resistance.

From a bullish perspective:
→ the ascending channel remains intact, and a drop to the lower boundary could be followed by a resumption of the upward trend;
→ former resistance at 0.65600 now acts as support;
→ if the move from 0→A is considered the dominant impulse, the fall from A→B could be viewed as a normal correction.

Taking the above into account, both perspectives appear justified, so a consolidation around current levels can be considered the baseline scenario. At the same time, upcoming news from the United States may significantly influence further market dynamics:
→ tomorrow at 15:30 (GMT+3) — GDP and jobless claims data;
→ the day after tomorrow at the same time — Core PCE Price Index.

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