AUD/USD Forecast: Traders Eye US CPI Report Impact as Pair Tests Key 0.7100 Resistance

The AUD/USD currency pair is trading defensively below the pivotal 0.7100 level amid ongoing consolidation.

Market participants are bracing for the upcoming US CPI report, expected to provide crucial insights into inflation trends and Federal Reserve policy.

Technical Analysis Breakdown

Immediate resistance looms at 0.7100 and 0.7150, while support holds temporarily at 0.7050.

A break below 0.6980 could accelerate declines toward 0.6900 or the multi-month low of 0.6850.

The pair remains trapped in a narrowing pattern within its multi-year range of 0.6500 to 0.7500, signaling potential volatility expansion.

CPI Report Scenarios and Historical Impact

Hotter-than-expected CPI data would likely strengthen the USD, pushing AUD/USD lower and widening interest rate differentials.

Cooler inflation figures could weaken the USD, enabling a breakout above 0.7100 toward 0.7150 or higher.

Historically, CPI surprises exceeding 0.3 percentage points have triggered sustained trends lasting multiple sessions.

Institutions like Goldman Sachs highlight sticky services inflation as key for future Fed decisions.

Looking ahead, Commonwealth Bank notes AUD/USD's vulnerability, with breakouts hinging on post-CPI catalysts amid elevated volatility.