The Australian dollar (AUD) fell to 0.6458 against the U.S. dollar (USD) yesterday, marking its lowest level since October 17, 2025. The AUD/USD pair has declined by about 2% from its recent peak of 0.6618 recorded on October 29, 2025, to yesterday’s low. Despite this pullback, the pair remains up roughly 5% year-to-date and is currently trading near the 0.6500 level.
The Reserve Bank of Australia (RBA) decided on Tuesday to keep interest rates unchanged at 3.60%, in line with expectations. This decision came after the Consumer Price Index (CPI) rose 3.2% year-on-year, above both the forecast of 3.0% and the previous reading of 2.1%.
Recent Australian economic data indicate weakness in overall performance:
• The Manufacturing PMI fell to 49.7, signaling contraction, down from the previous reading of 51.4.
• The Services PMI eased to 52.5, below expectations of 53.1.
• Employment change came in at 14.9K, below expectations of 20.5K, though better than the prior -11.8K reading.
• The unemployment rate rose to 4.5%, higher than both the forecast and the previous 4.3%.
Another key factor weighing on the AUD/USD pair is the rebound in the U.S. dollar index, which climbed above the key psychological level of 100 to reach 100.36 — its highest level since May 29. This strength was driven mainly by the cautious tone of Federal Reserve Chair Jerome Powell, who dismissed the certainty of a rate cut in the December meeting, along with renewed demand for safe-haven assets, including the U.S. dollar.
From a technical perspective, a break below the pivot point at 0.6493 could lead the pair to test support levels at 0.6472, 0.6437, and 0.6416. Conversely, if the pair holds above the pivot, it may target resistance levels at 0.6528, 0.6549, and 0.6584.
The Relative Strength Index (RSI) currently stands at 45, indicating bearish momentum for the AUD/USD pair. Meanwhile, the MACD shows a bearish crossover between the blue line and the orange signal line, further supporting the negative outlook for the pair.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
