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AUD/USD slides below 0.6950 after softer Australian CPI
Societe Generale said markets have scaled back expectations for an RBA hike, with Dec-26 OIS implied odds dropping to 50% from prior levels.
Societe Generale highlighted that AUD/USD is trading offered below 0.6950 following a softer June Australian CPI report. The analysis pointed to markets dialing back expectations for an RBA rate hike.
Technically, the pair has defended the March trough and the 200-day moving average near 0.6900, while the first resistance is seen at 0.7025. After that level, higher projection targets are flagged at 0.7090 to 0.7110 and 0.7200.
The note also described a pattern of lower highs since May as bearish, and linked the outlook to inflation that undershot, reinforcing the case for an RBA status quo. It added that Dec-26 OIS implied odds for an outcome tied to the pricing of policy expectations have fallen to 50%.