The Australian Dollar (AUD) came under pressure against the US Dollar (USD) following a softer-than-expected June Consumer Price Index (CPI) reading, according to Societe Generale analysts. The AUD/USD pair traded below 0.6950 after the CPI data release, which led markets to scale back expectations for a rate hike from the Reserve Bank of Australia (RBA) [1]. The sequence of lower highs since May has established a bearish technical bias, and the inflation undershoot has reinforced the case for the RBA to maintain its current policy stance. This is reflected in the December 2026 Overnight Index Swap (OIS) implied odds, which have dropped to 50% for a rate hike [1].
Despite the downward pressure, AUD/USD managed to defend both the March trough and the 200-day moving average (200-DMA), which is currently around 0.6900, resulting in a brief rebound. The decline in November 2025 also found support near this moving average, highlighting its technical significance [1]. The first resistance level is identified at 0.7025; a break above this could signal an extension of the uptrend, with further projection targets at 0.7090/0.7110 and 0.7200 [1].
Overall, the market reaction to the softer CPI has been negative for the Australian Dollar, with technical analysis suggesting caution as the sequence of lower highs persists. The market is now less convinced of an imminent RBA rate hike, as reflected in the OIS market pricing [1].
CONCLUSION
The softer June CPI has weighed on the Australian Dollar, reducing market expectations for an RBA rate hike. Technical support near the 200-DMA has limited further downside for now, but the overall bias remains cautious as the market digests the implications of the inflation data.