The Australian Dollar scaled higher against the US Dollar for the second straight session, buoyed by a combination of domestic inflation dynamics and external macroeconomic factors. Higher-than-expected consumer price figures from Australia have firmly kept expectations of interest rate hikes by the Reserve Bank of Australia alive, providing a steady boost to the currency pair. Simultaneously, a subdued US Dollar, driven by falling Treasury yields and Middle East diplomatic developments, has further supported the uptrend in the AUD/USD pair.
Australian CPI Exceeds Forecasts, Fueling Hawkish RBA Expectations
Data released by the Australian Bureau of Statistics showed that the headline Consumer Price Index increased by 3.5% year-over-year in July. While this represents a moderation from the 3.8% surge recorded in June, the reading came in above the market consensus forecast of 3.2%. The persistence of elevated inflation pressures suggests that price growth remains sticky, leaving the door wide open for further monetary policy tightening by the Reserve Bank of Australia. The hawkish policy backdrop continues to underpin demand for the Aussie dollar among market participants.
US Dollar Softens Ahead of Core PCE and GDP Revisions
In contrast, the Greenback faced modest selling pressure as investors turned cautious ahead of upcoming US economic indicators, including the Personal Consumption Expenditures price index and revised second-quarter Gross Domestic Product data. Beyond economic releases, market sentiment has been influenced by renewed diplomatic efforts surrounding US-Iran peace talks, softening crude oil prices, and declining US Treasury yields. Diminishing expectations of immediate aggressive tightening by the Federal Reserve have capped the US Dollar's upside, creating a supportive backdrop for foreign currency pairs.
AUD/USD Technical Outlook and Key Price Levels
From a technical standpoint, AUD/USD maintains a constructive bias, holding firmly above its 100-period Simple Moving Average on the 4-hour chart at 0.7085. Live market data shows the pair trading near 0.7179, reflecting a 0.34% gain from the previous close of 0.7155. The 14-period Relative Strength Index sits at 68, indicating solid bullish momentum without entering extreme overbought territory. Moving averages reinforce the long-term uptrend, with the 20-period Exponential Moving Average at 0.7086 and the 50-period Exponential Moving Average at 0.7050, well above the 200-period EMA at 0.6909. On the downside, immediate support is established at 0.7167 and 0.7155, with broader support at 0.7085. Upside resistance is positioned near 0.7183 and 0.7187, within the broader 52-week trading range of 0.6422 to 0.7277.
Cross-Currency Trends and Precious Metals Dynamics
Broader currency markets reflected similar trends, with GBP/USD rebounding toward resistance around the 1.3650 mark amid general US Dollar softness. EUR/USD also registered modest gains around 1.1670, keeping the 1.1700 resistance barrier in focus. Meanwhile, Gold prices fluctuated near $4,650 per ounce as traders awaited the US PCE inflation report for clues regarding the Federal Reserve's future interest rate trajectory. Falling US yields and a softer Greenback continue to provide a floor for non-yielding bullion.
