AUD/USD Recovers After Soft CPI Data as Risk Sentiment Supports Aussie

AUD/USD Recovers After Soft CPI as Risk Sentiment Supports Aussie

The Australian Dollar (AUD) saw modest early-session weakness after May CPI came in at 2.1% year-on-year, missing the market forecast of 2.3%. The trimmed mean CPI also dropped to 2.4% from 2.8%, reinforcing expectations of a potential RBA rate cut in July.

Despite this, the AUD/USD pair recovered swiftly and was last seen around 0.6500, buoyed by prevailing US Dollar softness and improving global risk sentiment, following easing geopolitical tensions in the Middle East.

Technical Outlook

• Bearish momentum on the daily chart appears to be losing strength.
• RSI is rising, indicating potential for sideways-to-bullish correction.
• Key resistance sits at 0.6550, while support levels are noted at 0.6485 and 0.6450 (aligned with the 50-day moving average).

Overall, the Aussie remains supported by risk-on flows and a weakening USD, but further directional clarity may come with upcoming US macroeconomic data and the July RBA meeting.

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