In the early Asian session on Tuesday (June 10th), the Australian dollar rose against the US dollar, trading around 0.65. As of 11:22 Beijing time, the AUD/USD was quoted at 0.6520, up 0.10%. The previous trading day, the AUD/USD closed at 0.6513. Australia’s core inflation rate dropped to 2.9% in the first quarter, falling back to the central bank’s target range of 2% to 3% for the first time since the end of 2021.
This improvement in the key indicator provides an important basis for the shift in monetary policy. The Reserve Bank of Australia (RBA) predicts that the core inflation rate will further slow to 2.6% by the end of 2025, indicating that price pressures continue to ease. Meanwhile, global economic uncertainty has intensified, further strengthening the necessity of implementing loose policies. The market generally expects that the probability of the RBA cutting interest rates again at its policy meeting on July 8th has risen to 77%. Analysts point out that as inflationary pressure continues to ease, the benchmark interest rate may be lowered to 3.10% or lower by early 2026, gradually approaching the neutral policy range. This interest rate level will neither provide additional stimulus to the economy nor impose significant restraints, marking that Australia’s monetary policy is entering a new stage. The current market focus has shifted to how the RBA strikes a balance between the improvement in domestic inflation and the impact of global risk factors on the policy pace.
Technical Analysis of AUD/USD
Resistance Levels
If the Australian dollar breaks through the 2025 high of 0.6537 against the US dollar (May 26th), the next target could point to the November 2024 high of 0.6687, and it might even test the 2024 high of 0.6942.
Support Levels
On the downside, the initial support is at 0.6356 (the low point on May 12th), and the 55-day simple moving average (SMA) at 0.6359 further strengthens this support.
If this level is broken, the 100-day SMA temporary support level of 0.6328 will come into play, with further support being the psychological level of 0.6000 and the 2025 low of 0.5913 (April 9th).
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