The AUD/USD currency pair has shown signs of renewed bullish momentum, buoyed by shifting macroeconomic fundamentals and a strengthening technical structure. This resurgence comes amid heightened volatility in the broader foreign exchange markets, triggered by the latest US inflation data and shifting monetary policy expectations.
The pair climbed to a high of 0.6475, marking a 1.85% recovery from its weekly low, a notable rebound as market participants repositioned ahead of key data releases from both the United States and Australia. In their article, Raliplen offers a detailed and expert analysis of the subject.
US Inflation Points to a Fed Cut
The move in AUD/USD was catalyzed by a softer-than-expected Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS). Headline CPI fell to 2.3% in April, down from the previous month and below the consensus estimate of 2.4%. This print came in the same month that the US President announced a new round of tariffs, setting off another round of global trade realignment.
Meanwhile, core inflation, which excludes food and energy, remained steady at 2.8%. While the market initially reacted positively to the weaker headline figure, some analysts caution that these could be temporary lows, given the lagged impact of recently imposed tariffs. Notably, the inflation data was compiled during a period when many US companies were still utilizing pre-tariff inventory, which dampened price pressures temporarily.
This dynamic was evidenced by the record US trade surplus in March, a sign that importers rushed to stockpile goods from Asia, especially from China and Vietnam, ahead of anticipated price hikes. With inventories now normalizing, price pressures could soon intensify, depending on how tariff policies evolve.
However, there’s a counterbalancing factor: the United States has begun lowering select tariffs. The White House recently agreed to cut tariffs on Chinese imports from 145% to 30%, and also eased trade barriers with the United Kingdom. Despite this moderation, the US Administration officials maintain that a 10% baseline tariff will remain in place, preserving a generally protectionist tone in trade policy.
Australia Jobs Data and Upcoming US Reports
Looking ahead, market focus will shift to several critical economic releases that could further shape the AUD/USD trajectory. Australia will publish its April employment data, with economists forecasting that the unemployment rate will hold steady at 4.1% and that the economy will add 20,000 jobs. A stronger-than-expected report could bolster the Aussie, especially if accompanied by a rise in full-time employment.
Simultaneously, the United States is set to release its retail sales figures, Philadelphia Fed manufacturing index, and Producer Price Index (PPI) report — all of which could provide new insights into consumer demand and inflationary pressures. Weak retail data or a soft PPI reading would likely reinforce expectations for a Fed rate cut, providing further support to risk-sensitive currencies like the AUD.
AUD/USD Technical Analysis
From a technical standpoint, the AUD/USD pair is flashing several bullish signals. The exchange rate has broken above 0.6478, reinforcing short-term upside momentum. Importantly, the pair has established an ascending channel, signaling a sustained upward trend.
Moreover, the 50-day and 100-day Exponential Moving Averages (EMAs) are on the verge of forming a golden cross — a widely followed bullish pattern that occurs when a shorter-term moving average crosses above a longer-term moving average. This setup typically points to a trend reversal or continuation.
Adding to the bullish picture is the fact that AUD/USD has surpassed the 50% Fibonacci retracement level, calculated from the recent swing high to low. This level often serves as a critical psychological resistance, and breaching it suggests that buyers are gaining strength.
Given this confluence of technical indicators, AUD/USD is likely to continue its climb. The next resistance zone lies at the 61.8% Fibonacci retracement level, located near 0.6550. A decisive break above this area could open the door to further gains, potentially targeting the 0.6620–0.6650 range in the medium term.
Conclusion
The recent rally in AUD/USD is supported by both fundamental catalysts and technical structure. The softening US inflation data has reignited expectations for Fed easing, putting downward pressure on the US Dollar Index (DXY) and lifting commodity-linked currencies. At the same time, improving sentiment around Australia’s labor market and an emerging mini golden cross on the chart have created a favorable backdrop for further upside.
Traders should remain alert to key releases, particularly the Australian employment report and US retail and PPI data, as they may determine whether AUD/USD sustains its bullish momentum or faces short-term retracements. For now, the technical bias appears upward, and any dip could represent a buying opportunity in line with broader macroeconomic trends.
