Societe Generale analysts report that the Australian Dollar (AUD) has retreated against the US Dollar (USD), with the AUD/USD pair pulling back toward its 50-day moving average after reaching an interim high near 0.7280 in May [1]. The analysts highlight that the recent decline is attributed to a softer-than-expected Australia Consumer Price Index (CPI) and weaker employment data, which have reduced the likelihood of further interest rate hikes by the Reserve Bank of Australia (RBA) [1].
Technical analysis from Societe Generale points to 0.7070 as the first key support level for AUD/USD, with resistance identified in the 0.7220–0.7280 range [1]. A breach below the 0.7070 support could trigger a deeper decline toward 0.6975, and potentially further down to the lower limit of a multi-month channel at 0.6850/0.6830 [1]. The analysts note that the spot rate is 'mildly offered' following the below-forecast April CPI, which has dimmed prospects for additional RBA rate hikes [1].
The market is closely watching whether AUD/USD can hold above its 50-day moving average, as a failure to do so may signal further downside risk [1]. The recent pivot high of 0.7280 is seen as a near-term hurdle for any potential recovery in the currency pair [1].
CONCLUSION
The Australian Dollar faces pressure as softer inflation and employment data reduce expectations for further RBA rate hikes. Key technical levels are in focus, with a break below 0.7070 potentially opening the door to further declines. Market sentiment remains cautious as traders monitor the AUD/USD's ability to hold above its 50-day moving average.