Australian Dollar loses ground for fourth day as NAB forecasts future RBA rate cuts

US CPI accelerated to 4.2% YoY in May, reinforcing expectations for a higher-for-longer Fed stance.
Core CPI rose just 0.2% MoM, slightly below consensus.
NAB expects the RBA’s next move to be a rate cut, adding pressure on the Australian Dollar.

Agustin Wazne FXStreet

The AUD/USD pair trades near 0.7020 on Wednesday, as the Australian Dollar (AUD) continues to lose value after the latest United States (US) inflation report was released mostly in line with expectations, reinforcing the view that the Federal Reserve (Fed) could keep interest rates elevated for longer.

The May Consumer Price Index (CPI) rose 0.5% MoM, matching forecasts but decelerating from the previous 0.6% pace. Annual headline inflation climbed to 4.2% YoY from 3.8%, meeting market expectations and highlighting persistent price pressure in the US economy.

Meanwhile, core CPI, which excludes food and energy, increased 0.2% MoM, below the expected 0.3% and down from 0.4% previously. Annual core CPI edged up to 2.9% from 2.8%. After the report, the US Dollar (USD) failed to find support.

On another note, the National Australia Bank (NAB) maintained that the Reserve Bank of Australia’s (RBA) next policy move is likely to be a rate cut, although the timing remains uncertain. NAB no longer expects another rate hike and believes the current cash rate could represent the peak of the tightening cycle, weighing on the AUD.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7019, maintaining a bearish near-term bias as it remains below both the 20-period Simple Moving Average (SMA) at 0.7045 and the 100-period SMA at 0.7127. The clustering of nearby resistance levels just overhead suggests rallies are likely to be sold into, while the Relative Strength Index (RSI) hovering around 35 hints at lingering downside pressure without yet signaling outright oversold conditions.

On the topside, initial resistance is aligned at 0.7027, followed by 0.7038 and the 20-period SMA at 0.7045, with the 100-period SMA further up at 0.7127 reinforcing the broader cap. On the downside, immediate support is located at 0.7018, ahead of a lower horizontal floor at 0.6998, where a break would open the door to a deeper extension of the current bearish phase.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

GBP/USD defends 1.3300 after strong UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the American session on Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US July PMI data failed to trigger relevant price action.

EUR/USD remains below 1.1400 after mixed US PMIs

EUR/USD pressures daily lows below the 1.1400 mark in the American session on Friday. Mixed S&P Global PMIs, as manufacturing output contracted while services activity expanded in July, triggered no relevant market reaction. The focus remains in Middle East developments and inflation-related concerns.

Gold holds above $4,050 but momentum still missing

Gold builds on its modest intraday bounce and climbs above the $4,050 level on Friday, hitting a fresh daily high amid a modest US Dollar pullback. The fundamental backdrop, however, warrants some caution before confirming that the pullback from an over two-week high, touched on Wednesday, has run its course and positioning for any meaningful upside.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

XRP retreats as ETF interest cools

Ripple (XRP) slides toward the short-term $1.10 support on Friday, as broader crypto market sentiment weighs on crypto assets. The sell-off mainly stems from fears of inflation in the United States (US) amid the ongoing war in the Middle East and rising Oil prices.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.