30 July 2025,06:06
Daily Market Analysis
30 July 2025, 06:06
Key Takeaways:
*AUD wavers as traders await CPI clarity and RBA direction, with inflation expected to ease but remain sticky enough to justify the central bank’s wait-and-see stance.
*Global headwinds persist, including softer iron ore prices and renewed U.S. trade threats toward Asia, adding downside pressure on the Aussie.
*AUD/USD vulnerable to dual catalysts, with CPI and the FOMC poised to inject volatility as markets reassess both Fed and RBA trajectories.
Market Summary:
The Australian Dollar is struggling to find upward momentum ahead of the closely watched Q2 CPI report, with the data likely to determine whether the Reserve Bank of Australia (RBA) proceeds with the 25bp rate cut it deferred at its last meeting. Governor Bullock has emphasized patience and data-dependency while noting the labour market is still tight. Trimmed mean CPI is expected to slow to 2.7% y/y from 2.9%, while headline inflation is forecast to ease to 2.1% y/y, reinforcing expectations that inflation is cooling—albeit gradually.
Yet, the RBA’s cautious tone suggests they may still wait for additional confirmation before committing to a cut, particularly given the delicate global backdrop. Australia’s external environment remains challenging: softer iron ore prices, an unresolved U.S.-China tariff framework, and renewed U.S. protectionist threats toward Vietnam and Indonesia are all weighing on sentiment.
From a technical lens, AUD/USD shows signs of fatigue near 0.6650, with a downside break toward 0.6450 plausible if CPI underwhelms or if the Fed delivers a more hawkish-than-expected message. Still, a dovish Fed or progress in China trade talks could offer temporary relief. In the short term, AUD remains highly sensitive to both domestic data and global risk appetite, with volatility likely to rise around the dual catalysts of CPI and the FOMC.
Technical Analysis
The chart of AUD/USD shows the pair trading within a well-defined ascending channel, though recent price action suggests downside pressure as it pulls back from the upper boundary near 0.6644. After peaking at this resistance level, AUD/USD has drifted lower, now hovering around 0.6515 and just below the midline of the channel.
Momentum indicators show bearish undertones. The Relative Strength Index (RSI) remains below the neutral 50 line at 42, reflecting weak buying pressure, although it has flattened slightly, suggesting consolidation. Meanwhile, the MACD is in negative territory, with the signal line above the MACD line and red histogram bars persisting, indicating continued bearish momentum. However, the flattening histogram may signal early signs of a potential base forming.
If AUD/USD holds above the lower channel support near 0.6460, the uptrend structure remains intact, and a rebound toward 0.6530 and possibly 0.6644 cannot be ruled out. A break below 0.6460, however, would be technically significant and could open downside risks toward 0.6415. Traders will closely watch upcoming Australian inflation data and U.S. macro releases for directional cues.
Resistance Levels: 0.6530, 0.6644
Support Levels: 0.6460, 0.6415
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