AUD/USD Price Analysis: Inflation Surprise Tempers RBA Cut Bets

• The AUD/USD price analysis points north after hotter-than-expected inflation in Australia.

• The dollar rebounded on Tuesday after Trump eased tariffs on automobiles.

• Data revealed fewer US job vacancies.

The AUD/USD price analysis points north after hotter-than-expected inflation in Australia lowered bets on an aggressive RBA rate cut. Meanwhile, the dollar held steady after Trump eased tariffs on automobiles, easing concerns about a global recession. 

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Data released on Wednesday revealed that inflation in Australia rose by 0.9% in the first quarter, higher than the estimated 0.8%. Meanwhile, the annual figure increased by 2.4%, compared to the forecasted 2.3% increase. The upbeat data prompted traders to dial back bets for an aggressive RBA rate cut in May.

However, the report also showed that annual core inflation dropped to a 3-year low of 2.9% from 3.3%. This kept alive expectations for a 25-bps rate cut in May. The Reserve Bank of Australia paused at its last meeting. However, it was clear that policymakers were worried about global growth. Trump’s tariffs have dimmed the outlook for growth in most economies. 

Meanwhile, the dollar rebounded on Tuesday after Trump eased tariffs on automobiles. His softer stance has boosted demand for the US currency. However, data revealed fewer US job vacancies, pointing to weaker demand in the labor market.

AUD/USD key events 

• US ADP nonfarm employment change
• US advance GDP q/q
• US employment cost index q/q
• US core PCE price index m/m

AUD/USD technical price analysis: Consolidating below the 0.6450 resistance

On the technical side, the AUD/USD price has maintained its sideways move, chopping through the 30-SMA. Bulls are having a difficult time breaking above a solid resistance zone comprising the 0.6400 and the 0.6450 key levels. 

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Moreover, price action shows that neither bulls nor bears are willing to make big moves away from the SMA. Therefore, they are probably waiting for some major catalyst. The RSI has made a bearish divergence, a sign that bullish momentum is fading. 

Here, bears have a good opportunity to reverse the trend by pushing the price far below the SMA. Such a move would allow AUD/USD to retest the 0.6200 support and the 0.5 Fib retracement level. If this fails, bulls will break past the resistance zone, continuing the uptrend.

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