AUD/USD Price Analysis: Investors Brace for Pivotal US CPI Data

• Markets are bracing for the upcoming US consumer inflation data.

• Markets are pricing a 69% chance of a December Fed rate cut.

• Data from Australia showed strong consumer and business sentiment.

The AUD/USD price analysis shows a pause as indecision reigns ahead of the US consumer inflation figures. Meanwhile, the Aussie steadied its recent decline after economic figures from Australia on Tuesday showed strong consumer and business sentiment.

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Markets are bracing for the upcoming US consumer inflation data, which might show inflation increasing from 2.4% to 2.6%. Meanwhile, monthly price pressure might increase by 0.2%. This report will play a significant role in shaping the outlook for Fed rate cuts. Currently, markets are pricing a 69% chance that the US central bank will cut in December. This probability will likely change after the report. 

If inflation beats estimates, it might raise fears of renewed price pressures that would increase caution among policymakers. The US economy has already performed far better than expected, which has caused some to believe the Fed will pause in December. 

On the other hand, there is a chance inflation will miss forecasts. In this case, rate cut expectations will rise, and the dollar might drop from recent peaks.

Since Tuesday last week, the greenback has been on a solid uptrend due to Trump’s election win. As a result, the Australian dollar has collapsed. However, the drop has been less than in other major currencies. Trump’s victory has also increased risk appetite, keeping the Australian dollar strong. 

Meanwhile, data from Australia on Tuesday revealed that consumer sentiment rose in November. A separate report showed that business sentiment was also strong in October. Recent upbeat figures have pushed back bets for the first RBA rate cut to May next year.

AUD/USD key events today

• Core CPI m/m
• CPI m/m
• CPI y/y

AUD/USD technical price analysis: Price breaks uptrend channel

On the technical side, the AUD/USD price has broken its bullish trend pattern, indicating a bearish sentiment shift. Initially, the price had made a higher high and low. However, it failed to maintain this move as bears broke below the support trendline. 

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Furthermore, the price breached the 0.6550 key support level to trade well below the 30-SMA. At the same time, the RSI fell deeper into bearish territory. Given the new bearish momentum, AUD/USD might soon reach the 0.6500 key level.

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