AUD/USD Steady at $0.6412 as Aussie CPI Beats Forecasts, PCE Up Next

The Australian dollar is trading around $0.6412, getting a slight boost after a stronger-than-expected inflation reading early Wednesday. For currency markets, inflation is a big deal—higher prices typically mean central banks stay cautious about cutting interest rates, which can support a currency’s value.

Key Aussie Data Released:

• CPI q/q: 0.9% (vs. 0.8% expected)

• Trimmed Mean CPI q/q: 0.7% (vs. 0.6% expected)

• CPI y/y: 2.4% (slightly above forecast, unchanged from prior)

• Private Sector Credit: 0.5% (in line with expectations)

Why it matters: The stronger inflation print suggests the Reserve Bank of Australia (RBA) might delay rate cuts, helping keep the Aussie dollar supported. Higher interest rates often attract foreign investment, boosting currency demand.

Spotlight on U.S. Data: Key Risk Events Ahead

Later today, attention shifts to the U.S. economic calendar, where a flood of data could swing the AUD/USD pair significantly.

What to Watch — and Why:

• ADP Employment: A slowdown to 114K jobs (from 155K) would suggest softer U.S. labor demand—often bearish for the dollar.

• Q1 Advance GDP: A drop to 0.2% from 2.4% would signal fading economic momentum.

• Core PCE Price Index: The Fed’s preferred inflation measure. A fall to 0.1% (from 0.4%) could increase rate cut expectations.

• Pending Home Sales & Income Data: Weak results would reinforce the idea of a slowing consumer economy.

Bottom line: If the data comes in soft, the dollar could weaken, lifting AUD/USD. Strong numbers, however, may cap or reverse today’s gains.

Technical View: Watching for Breakout or Rejection

Technically, AUD/USD is showing early signs of strength. After bouncing off an ascending trendline and reclaiming the 50-period EMA at 0.6399, the bulls are eyeing a breakout.

Key Levels:

• Resistance: $0.6429 (breakout point), then $0.6449

• Support: $0.6400 (trendline and EMA zone)

Beginner-Friendly Trade Plan:

• Buy if price closes above $0.6429 → Target $0.6449

• Sell if price rejects $0.6429 → Watch for a dip toward $0.6400

• Stop-loss: Keep it 15–20 pips beyond entry to manage risk

Why it matters: A confirmed breakout shows momentum is building—but don’t jump in too early. Waiting for confirmation can help avoid false signals, especially with high-impact U.S. data on the way.