- The AUD/USD price analysis suggests a bearish bias as a slide in equities triggers outflows from the Aussie to safe-haven assets.
- RBA rate hike prospects continue to provide support to the Australian dollar.
- Markets await today’s US CPI and RBA meeting minutes next week for fresh impetus.
The Australian dollar fell below 0.6600 on Thursday, extending its decline to a sixth consecutive session and reaching a two-week low. AUD/USD weakened as global risk sentiment deteriorated, with falling equity markets weighing on risk-linked currencies.
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The Aussie has tracked Wall Street closely in recent months. This link showed again as global equities slid on renewed selling in technology stocks. Concerns about rising corporate debt, driven by heavy investment in artificial intelligence, prompted investors to seek safer assets, thereby reducing demand for the Australian dollar.
Meanwhile, rate expectations continue to offer some support. Markets still price in at least one Reserve Bank of Australia rate hike next year. A February move carries a 25% probability, rising to about 40% in March and nearly 70% by May. The Australian government’s upward revision to its inflation outlook earlier this week reinforced the view that the RBA may keep policy tight, limiting downside pressure on the currency.
The focus now shifts to the minutes from the RBA’s December meeting, which are due to be released next week. Traders will look for signals on how concerned policymakers remain about inflation and whether further tightening remains under discussion. Any firm stance on inflation risks could help stabilize the Aussie after its recent pullback.
Attention also turns to the US CPI report due later today. Headline and core inflation are both expected near 3.0% YoY. A softer reading could weigh on the US dollar, easing pressure on AUD/USD, while firmer inflation would likely support the greenback and extend the pair’s decline.
In the near term, AUD/USD remains driven by equity market moves and inflation data, with risk sentiment setting the tone.
AUD/USD Technical Price Analysis: Buyers Fading Near 0.6600
The AUD/USD price has dropped below the demand zone around 0.6610, with immediate support at 0.6600, a round number confluence by 100-period MA. Meanwhile, the RSI above the oversold area suggests cushion for more weakness. The price could test the horizontal level at 0.6580 ahead of the 200-period MA at 0.6550.
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On the flip side, the pair could find immediate resistance around the 20-period MA at 0.6630 ahead of a swing high near 0.6660. However, the path of least resistance lies on the downside.
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