The Australian Dollar (AUD) experienced a sharp decline, with the AUD/USD pair trading near the 0.6920 level on Tuesday, approaching a three-month low as investors anticipate the release of Australia's May Consumer Price Index (CPI) report scheduled for Wednesday, June 24, at 11:30 AEST [1]. The currency remains highly sensitive to inflation expectations, and the upcoming CPI data is expected to provide fresh insights into the Reserve Bank of Australia’s (RBA) policy outlook [1]. The previous April CPI reading indicated that annual inflation slowed to 4.2% from 4.6%, while trimmed-mean inflation edged higher to 3.4% year-over-year, suggesting that underlying price pressures remain persistent [1].
Meanwhile, the US Dollar (USD) has held steady, supported by positive US economic data. The ADP Employment Change 4-Week Average showed US private payrolls rising by 30.75K on average, an improvement from the previous 26.5K reading. This resilience in hiring conditions has bolstered the USD, as markets reassess the possibility of the Federal Reserve raising interest rates later in the year [1].
Technical analysis indicates that AUD/USD trades at 0.6916 on the 4-hour chart, maintaining a bearish near-term bias with the price below both the 20-period Simple Moving Average (SMA) at 0.6989 and the 100-period SMA at 0.7061. The pair is testing a key horizontal support area around 0.6915, while the Relative Strength Index (RSI) has slipped below 20, signaling oversold conditions that may slow, but not yet reverse, the downside momentum [1]. Resistance levels are noted at 0.6925, 0.6943, and 0.6960, with broader supply zones at the 20-period and 100-period SMAs, which would need to be reclaimed to ease the prevailing bearish tone [1].
CONCLUSION
The Australian Dollar's decline reflects investor caution ahead of the crucial CPI release, with technical indicators pointing to continued bearish momentum. The US Dollar's strength, supported by robust employment data, adds further pressure to AUD/USD. Market participants are closely watching the CPI outcome for signals on the RBA's policy direction.