Audusd rises 0.89% amid declining Australian inflation and market optimism

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.89%	57.2 Pips
Week to-date	0.98%	63 Pips
June	0.98%	63 Pips

Upcoming key events (London Time)

Tue 02:30 AM AUD RBA Meeting Minutes
Wed 02:30 AM AUD GDP (3-mth)

What happened lately

Economic data from Australia indicates a notable decrease in the TD Securities Inflation rate over the 12 months leading up to May 2025. The inflation rate fell to 2.6%, a reduction from the 3.3% recorded in April. This decline in inflation suggests reduced price pressures within the Australian economy, which could potentially lead to adjustments in monetary policy by the Reserve Bank of Australia (RBA) if they deem it necessary to meet their inflation targets.

The market reacted with the AUDUSD currency pair experiencing a rise of 0.89% on Monday, bringing the exchange rate to 0.64882. This increase could be attributed to a variety of factors, including changes in market sentiment or reactions to the inflation data. Investors might have perceived the reduced inflation rate as a signal that Australia is managing inflation effectively, which can be a positive indicator for the economy.

Upcoming economic events in Australia are of high importance and could influence the AUDUSD further. The RBA Meeting Minutes scheduled for Tuesday at 2:30 AM will provide insights into the central bank’s discussions and potential monetary policy adjustments. Additionally, the GDP figures for the March quarter will be released on Wednesday at 2:30 AM, helping assess the economic growth over that period. These events are likely to create volatility in the currency markets, especially concerning the AUDUSD pair.

In terms of the AUDUSD outlook, the recent rise in the pair reflects positive market sentiment following the decrease in inflation. The lower inflation rate can ease concerns over aggressive interest rate hikes, which can be supportive of economic growth and, consequently, the Australian dollar. However, much will depend on the upcoming RBA Meeting Minutes and GDP figures. If the RBA minutes suggest a dovish stance due to easing inflation pressures, this could limit gains in AUDUSD. Conversely, strong GDP growth could further boost the Australian dollar, supporting continued strength in the AUDUSD pair.

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What can we expect from AUDUSD today?

AUDUSD on Monday rose 0.89% to 0.64882. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.65152 with break above could target R2 at 0.65423 or figure level area. While towards the downside, we are looking at daily low of 0.64315 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.65004 may suggest continuation after recent positive movement.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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