With US CPI knocking on the door, how will AUD/USD move?
2025-09-11 19:52:49
On Thursday (September 11th), the Australian dollar (AUD/USD) pair retreated from a 10-month high of 0.6635 reached the previous day, trading around 0.6600 before the US market opened. With the release of the US August CPI at 8:30 PM, the US dollar index (DXY) strengthened slightly, approaching a three-day high of 98.00. The AUD/USD exchange rate remained under pressure but remained in an upward trend.
The focus is on inflation. According to consensus forecasts, the US Consumer Price Index (CPI) is expected to rise to 2.9% year-on-year in August, up from 2.7% in July; the core CPI is expected to remain at 3.1% year-on-year. On a monthly basis, both the headline and core CPI are forecast to increase by 0.3%. Market analysts believe that tariff pass-through is continuing to drive commodity prices, and even with a marginal slowdown in services inflation, the headline CPI could jump to 0.4% on a monthly basis. Prior to the data release, the US dollar index stabilized around 98.00, causing widespread volatility in the non-US dollar index.
In terms of interest rate pricing, the market believes a 25 basis point rate cut by the Federal Reserve next week is almost certain, with a 92% probability. However, the probability of a cumulative 75 basis point cut by the end of the year is only about 70%, and the path remains to be determined. Officials' statements are also divided: Austan Goolsbee said inflation may rebound, while Neel Kashkari emphasized that commodity inflation needs to be monitored due to tariffs. Mary Daly believes the price increases are more of a one-time shock, while Christopher Waller bluntly calls it a "minor episode" and expects a return to near 2% in about six months. The greater the divergence, the more significant the CPI report becomes as an anchor.
Equally crucial variables are those in Australia. One-year consumer inflation expectations rose to 4.7% in September, up from 3.9% the previous month. Upward expectations often limit the Reserve Bank of Australia's continued easing, making it less likely the RBA will rush to cut interest rates at subsequent meetings. For the Australian dollar, two narratives—rising domestic inflation expectations and the trajectory of US inflation—are conspiring to shape intraday volatility.
The four-hour candlestick chart (240 minutes) shows that bulls still have the upper hand, but momentum is slowing at high levels. The Bollinger Bands are opening modestly, with the upper band at 0.6633, the middle band at 0.6591, and the lower band at 0.6548. The latest price is 0.6608, still above the middle band and close to the upper band. Yesterday's high of 0.6635 was reached before the pullback, and the real body is narrowing, indicating profit-taking at the overlap between the upper band and the previous high.
The MACD DIFF is 0.0015, the DEA is 0.0016, and the histogram is -0.0003. The momentum has turned from positive to negative, but the amplitude is very small. The top divergence has not yet been established. As long as there is no effective death cross and the price does not break the middle line, the definition of the upward trend remains unchanged. The RSI (14) is at 59.7333, which has fallen from the peak of 70. The strong trend has not been lost but has cooled down. In terms of price, the upper resistance focuses on 0.6633/0.6635; if it breaks through and closes above it with large volume, the Bollinger Bands may open further. The focus below is 0.6591 as the short-term strength and weakness watershed, and below it is 0.6548; below it is 0.6483 and 0.6462.
With event risks approaching, traders tend to "lock in profits first, wait for signals later," shifting to a mean-reversion rhythm. The US dollar's stabilization around 98.00 has increased nominal pressure, but the Australian dollar remains relatively resilient. First, rising domestic inflation expectations are providing marginal support to interest rate differentials, and second, US inflation will determine the next steps for US Treasury yields and the US dollar. On the options side, "rising implied volatility leads to convergence in directional positions," making 0.6600 a psychological level for sentiment. Overall sentiment is neutral to bullish, and the volume-price structure resembles a short-term squeeze rather than a top divergence.
Two short-term (24-48 hour) scenarios are more representative. First, if the monthly CPI rate reaches or exceeds 0.3%, with the core rate no weaker than 3.1%, or even the headline rate reaching 0.4%, the US dollar will be boosted, and AUD/USD may retrace to test 0.6591. If it breaks below and forms a MACD death cross, the pullback could extend to 0.6548. However, before the main trend is broken, a "healthy retracement" is more likely. Second, if the CPI falls short of expectations (monthly growth below 0.3% or year-on-year growth below 2.9%/3.1%), the market may strengthen bets on a cumulative 75 basis points of interest rate cuts this year, weakening the US dollar, and the exchange rate may resume its upward trend and challenge 0.6633/0.6635. A stable close above these levels significantly increases the probability of trend continuation.
In the medium term (1-3 weeks), the key remains inflation stickiness. If, as Waller suggests, this is merely a brief "interlude," followed by a slide back to near 2%, the US dollar could weaken in the medium term, while the Australian dollar, benefiting from the synergy between interest rate differentials and risk appetite, will likely maintain its upward trajectory. If Goolsbee and Kashkari's concerns prevail, the "second shock" of commodity inflation could prolong its stickiness, leading to further increases in US Treasury yields and a firm US dollar. AUD/USD's upside potential would be limited, potentially shifting into a range between 0.6548 and 0.6635.
Price and Rhythm Alignment: Combining charts and indicators, 0.6633/0.6635 are "confirmation levels." A valid breakout requires a candlestick close above this range, accompanied by a negative-to-positive MACD histogram. A mere touch of the shadow followed by a subsequent decline is likely a false breakout followed by a correction. 0.6591 is a "watch level." Sideways price consolidation above this level is often viewed as a sign of strong digestion. A break below this level on the four-hour chart, accompanied by two consecutive extended-volume bearish candlesticks, would signal a downgrade to a range-bound trend. 0.6548 is a defensive level. A break of this level would disrupt the upward trend established since late August, necessitating a recalibration of the technical definition from an "ascending channel" to a "box" or the early stages of a "descending wedge."
Fundamentals:
The focus is on inflation. According to consensus forecasts, the US Consumer Price Index (CPI) is expected to rise to 2.9% year-on-year in August, up from 2.7% in July; the core CPI is expected to remain at 3.1% year-on-year. On a monthly basis, both the headline and core CPI are forecast to increase by 0.3%. Market analysts believe that tariff pass-through is continuing to drive commodity prices, and even with a marginal slowdown in services inflation, the headline CPI could jump to 0.4% on a monthly basis. Prior to the data release, the US dollar index stabilized around 98.00, causing widespread volatility in the non-US dollar index.
In terms of interest rate pricing, the market believes a 25 basis point rate cut by the Federal Reserve next week is almost certain, with a 92% probability. However, the probability of a cumulative 75 basis point cut by the end of the year is only about 70%, and the path remains to be determined. Officials' statements are also divided: Austan Goolsbee said inflation may rebound, while Neel Kashkari emphasized that commodity inflation needs to be monitored due to tariffs. Mary Daly believes the price increases are more of a one-time shock, while Christopher Waller bluntly calls it a "minor episode" and expects a return to near 2% in about six months. The greater the divergence, the more significant the CPI report becomes as an anchor.
Equally crucial variables are those in Australia. One-year consumer inflation expectations rose to 4.7% in September, up from 3.9% the previous month. Upward expectations often limit the Reserve Bank of Australia's continued easing, making it less likely the RBA will rush to cut interest rates at subsequent meetings. For the Australian dollar, two narratives—rising domestic inflation expectations and the trajectory of US inflation—are conspiring to shape intraday volatility.
Technical aspects:
The four-hour candlestick chart (240 minutes) shows that bulls still have the upper hand, but momentum is slowing at high levels. The Bollinger Bands are opening modestly, with the upper band at 0.6633, the middle band at 0.6591, and the lower band at 0.6548. The latest price is 0.6608, still above the middle band and close to the upper band. Yesterday's high of 0.6635 was reached before the pullback, and the real body is narrowing, indicating profit-taking at the overlap between the upper band and the previous high.
The MACD DIFF is 0.0015, the DEA is 0.0016, and the histogram is -0.0003. The momentum has turned from positive to negative, but the amplitude is very small. The top divergence has not yet been established. As long as there is no effective death cross and the price does not break the middle line, the definition of the upward trend remains unchanged. The RSI (14) is at 59.7333, which has fallen from the peak of 70. The strong trend has not been lost but has cooled down. In terms of price, the upper resistance focuses on 0.6633/0.6635; if it breaks through and closes above it with large volume, the Bollinger Bands may open further. The focus below is 0.6591 as the short-term strength and weakness watershed, and below it is 0.6548; below it is 0.6483 and 0.6462.
Market sentiment observation:
With event risks approaching, traders tend to "lock in profits first, wait for signals later," shifting to a mean-reversion rhythm. The US dollar's stabilization around 98.00 has increased nominal pressure, but the Australian dollar remains relatively resilient. First, rising domestic inflation expectations are providing marginal support to interest rate differentials, and second, US inflation will determine the next steps for US Treasury yields and the US dollar. On the options side, "rising implied volatility leads to convergence in directional positions," making 0.6600 a psychological level for sentiment. Overall sentiment is neutral to bullish, and the volume-price structure resembles a short-term squeeze rather than a top divergence.
Market outlook:
Two short-term (24-48 hour) scenarios are more representative. First, if the monthly CPI rate reaches or exceeds 0.3%, with the core rate no weaker than 3.1%, or even the headline rate reaching 0.4%, the US dollar will be boosted, and AUD/USD may retrace to test 0.6591. If it breaks below and forms a MACD death cross, the pullback could extend to 0.6548. However, before the main trend is broken, a "healthy retracement" is more likely. Second, if the CPI falls short of expectations (monthly growth below 0.3% or year-on-year growth below 2.9%/3.1%), the market may strengthen bets on a cumulative 75 basis points of interest rate cuts this year, weakening the US dollar, and the exchange rate may resume its upward trend and challenge 0.6633/0.6635. A stable close above these levels significantly increases the probability of trend continuation.
In the medium term (1-3 weeks), the key remains inflation stickiness. If, as Waller suggests, this is merely a brief "interlude," followed by a slide back to near 2%, the US dollar could weaken in the medium term, while the Australian dollar, benefiting from the synergy between interest rate differentials and risk appetite, will likely maintain its upward trajectory. If Goolsbee and Kashkari's concerns prevail, the "second shock" of commodity inflation could prolong its stickiness, leading to further increases in US Treasury yields and a firm US dollar. AUD/USD's upside potential would be limited, potentially shifting into a range between 0.6548 and 0.6635.
Price and Rhythm Alignment: Combining charts and indicators, 0.6633/0.6635 are "confirmation levels." A valid breakout requires a candlestick close above this range, accompanied by a negative-to-positive MACD histogram. A mere touch of the shadow followed by a subsequent decline is likely a false breakout followed by a correction. 0.6591 is a "watch level." Sideways price consolidation above this level is often viewed as a sign of strong digestion. A break below this level on the four-hour chart, accompanied by two consecutive extended-volume bearish candlesticks, would signal a downgrade to a range-bound trend. 0.6548 is a defensive level. A break of this level would disrupt the upward trend established since late August, necessitating a recalibration of the technical definition from an "ascending channel" to a "box" or the early stages of a "descending wedge."
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