Australian Dollar Analysis

ِAUDUSD On the fundamental side

the Australian dollar fell against the US dollar for the second day in a row, after falling yesterday from its highest level in fifteen months near 0.6767, coinciding with a surprise drop in Australian inflation rates yesterday.

Markets reduced the likelihood of the Reserve Bank of Australia raising interest rates in February to around 28%, ruling out expectations of monetary policy tightening for 2026 by about 7 basis points to 37 basis points.

Reserve Bank Deputy Governor Andrew Houser said the slowdown in inflation was welcome but largely in line with expectations, adding that core inflation in the last quarter was slightly higher than the Reserve Bank had anticipated.

Many analysts are still calling for interest rate hikes, arguing that core inflation remains too high. Much will depend on the fourth-quarter inflation report due at the end of this month.

The National Bank of Australia continues to plan a slight adjustment to monetary policy to focus more on inflation risks, with interest rates expected to rise by 25 basis points in February and May.

Rising commodity prices, such as gold and copper, have also contributed to supporting the Australian dollar.

On the other hand, we are awaiting tomorrow's non-farm payroll (NFP) data.

Technically

The AUD/USD pair is trading within an upward price channel on the four-hour chart and has reached the lower limit of this channel near the support levels of 0.6685 after rebounding from the upper limit yesterday.

The forecast indicates that the Australian dollar pair will rise in the coming period under the influence of the positive divergence of the MACD indicator.

We are targeting 0.6725 as the initial target and then the upper limit of the channel at 0.6785 as the final target.

This scenario will fail if the 0.6660 level is broken.