AUD/USD Price Analysis: Rate Cut Odds Climb on Soft Aus CPI

• The AUD/USD price analysis shows rising RBA rate cuts after downbeat inflation figures.

• Australia’s inflation increased by 1.9% annually, compared to the forecast of 2.1%.

• Traders remain cautious ahead of the FOMC meeting.

The AUD/USD price analysis shows a rise in RBA rate cut odds after downbeat inflation figures from Australia. Meanwhile, market participants are cautious ahead of the Fed policy meeting.

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Data on Wednesday revealed that Australia’s inflation increased by 1.9% annually, compared to the forecast of 2.1%. The miss came as a relief for RBA policymakers who had paused at the last meeting due to inflation worries. As a result, market participants moved to fully price a rate cut in August. At the same time, experts believe the central bank will cut in November.

“We believe that the board now has the confirmation it needs to continue on its ‘cautious’ – if not so predictable – path of removing current monetary restrictiveness,” said Luci Ellis, chief economist at Westpac.

“We therefore expect it to cut rates by 25 bps at its August meeting,” she added. “Further cuts in November, February 2026, and May 2026, also look increasingly likely.

Meanwhile, traders remain cautious ahead of the FOMC meeting. The Fed will likely hold rates due to the resilience of the economy and hot inflation. Moreover, market participants expect Powell to maintain his cautious tone, which would boost the dollar. 

AUD/USD key events today

• ADP Non-Farm Employment Change
• Advance GDP q/q
• FOMC meeting

AUD/USD price technical analysis: Bears attempt to break out of consolidation

On the technical side, the AUD/USD price has dropped to retest its range support at the 0.6500 level. The price trades well below the 30-SMA, a sign that bears have a strong lead. At the same time, the RSI is below 50, suggesting solid bearish momentum. 

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AUD/USD has remained in consolidation between the 0.6500 support and the 0.6590 resistance levels. Recently, bulls attempted to break out of this consolidation but failed. As a result, the price fell back into the range and dropped below the 30-SMA. 

Given the strong bearish bias, the price might break below the range support. Such a move would allow AUD/USD to retest the 0.6460 level. However, to confirm a breakout, the price would have to start making lower highs and lows below this level.

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