AUD/USD Holds Near 16‑Month Highs as CPI Outlook Strengthens the Australian Dollar

The Australian dollar has consolidated above the 0.6900 level, approaching its 16‑month peak, amid a backdrop of persistent US dollar weakness and growing expectations of further tightening by the Reserve Bank of Australia (RBA). At 0.6933 on 24 January 2026, the AUD/USD pair has already surpassed its 52‑week high of 0.6915, reflecting a robust rebound from the 52‑week low of 0.592308 recorded on 8 April 2025.

Key Market Drivers

  • US Dollar Pressure – A broad decline in the US dollar, driven by concerns over a potential shift in U.S. monetary policy, has been a consistent backdrop to the AUD/USD rally. Market sentiment has been further dampened by speculation that the Federal Reserve may adjust policy stance, reinforcing the dollar’s sell‑side pressure.

  • Australian CPI Anticipation – Traders have been positioning the AUD ahead of the upcoming Australian consumer price index release. Expectations of a modest but still noteworthy inflation reading have bolstered the case for a tighter policy environment from the RBA, supporting the AUD’s upward trajectory.

  • Positive Australian Economic Indicators – December 2025 quarterly reports from key Australian sectors—including a record‑breaking quarter for production and sales—have reinforced the narrative of a resilient domestic economy. The outlook for 2026 has been upgraded by several corporate announcements, signalling continued confidence in Australian growth prospects.

Technical Snapshot

  • Current Level – 0.6933 (24 January 2026)
  • Day‑High – 0.6935 (24 January 2026)
  • 52‑Week Range – 0.5923 – 0.6915
  • Short‑Term Support – 0.6900 (the 16‑month high)
  • Resistance – 0.6950 (just above the current level)

Forward Outlook

The AUD/USD pair is positioned to test the 0.6950 resistance zone in the coming trading sessions. Should the Australian CPI confirm a moderate inflation rate, the RBA’s policy tightening stance will likely gain further traction, providing additional upside potential for the AUD. Conversely, a softer CPI reading could temper the current rally and bring the pair back toward the 0.6900 support level.

Investors should monitor the release of the Australian CPI and any subsequent commentary from the RBA for signals on the sustainability of the current trend. The prevailing market environment, characterized by a weak US dollar and solid domestic fundamentals, continues to underpin a bullish bias for the AUD/USD pair in the near term.