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Published: 29 July 2026,06:38
Daily Market Analysis New
Key Takeaways:
*The Australian dollar came under selling pressure during the Asian session after inflation figures surprised to the downside, falling short of market expectations.
*The weaker CPI reading has reduced expectations for additional RBA tightening, prompting traders to scale back yield-supportive positions and weighing on the Aussie against major currencies.
*Near-term AUD direction will likely depend on upcoming economic releases, RBA commentary, commodity price movements, and broader market risk sentiment.
The Australian dollar (AUD) lost strength during today’s Asian session after the country’s latest inflation print came in lower than market expectations. The softer Consumer Price Index reading tempered the previously elevated hawkish expectations surrounding the Reserve Bank of Australia (RBA) and prompted a swift adjustment in currency positioning.
Prior to the data release, the Aussie had shown relative resilience against most G10 peers, supported by solid labour market figures and the view that domestic price pressures might keep the RBA on a firmer policy path. The weaker-than-anticipated inflation outcome has challenged that narrative, reducing the perceived likelihood of further rate hikes or a prolonged restrictive stance in the near term. As a result, traders have scaled back yield-supportive positions in the Australian dollar, leading to a notable decline against major counterparts, particularly the U.S. dollar.
In the near term, the Australian dollar is likely to remain sensitive to shifts in interest rate expectations and broader risk sentiment. A sustained period of cooler inflation could reinforce a more neutral RBA outlook and limit AUD upside, while any rebound in commodity prices or improvement in global risk appetite may provide partial support. Market participants will continue to monitor upcoming RBA communications and additional domestic data for clearer signals on the policy trajectory.
Overall, the softer inflation print has introduced a near-term headwind for the Australian dollar by cooling hawkish pricing. The currency’s path will depend on whether this disinflationary trend proves temporary or signals a more durable easing of price pressures.
Technical Analysis
AUD/NZD encountered strong resistance at the 61.8% Fibonacci Retracement level near 1.2105, where the pair was decisively rejected before declining by nearly 1%. This rejection reinforces the prevailing bearish structure and suggests that sellers remain firmly in control of the market.
The failure to break above the 61.8% Fibonacci level indicates that the recent recovery was likely corrective in nature, with the broader downtrend remaining intact. Following the rejection, AUD/NZD has resumed its downward trajectory and is now hovering around the key 1.2000 psychological support level.
The 1.2000 mark represents an important technical and psychological threshold. A decisive break below this level would strengthen the bearish outlook and could trigger an acceleration in selling pressure. Such a move would likely expose the pair to a retest of its previous low at 1.1932.
Furthermore, a sustained move below 1.1932 would confirm a continuation of the broader downtrend and could pave the way for additional downside in the medium term.
Resistance Levels: 1.2135, 1.2184
Support Levels: 1.1995, 1.1932
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