The USD remains mostly stable against major currencies. Last month’s NFP report has caused traders to reassess their expectations for a third rate cut by year-end. Wage growth was weaker than expected, limiting further positive moves for the USD.<\/p>\n
Attention now shifts to the upcoming US CPI report. The CPI is unlikely to prompt a rate cut at the July Fed meeting, with September possibly being the earliest. A soft CPI could increase the likelihood of a third rate cut by year-end, affecting the USD negatively.<\/p>\n
Conversely, a strong CPI might not prevent a second cut but could lessen the belief in it, potentially boosting the USD. The AUD has been influenced by the RBA, which recently held the Cash Rate steady, awaiting new CPI data.<\/p>\n
On the daily chart, the price has reached the top of a broadening wedge formation, which may lead to a strong price movement. Sellers might enter around the top trendline expecting a drop to the 0.6350 support zone, while buyers will watch for a breakout to push towards 0.69.<\/p>\n
On the 1-hour chart, the price shows rejection from the top trendline, indicating selling pressure. Buyers are leaning on a minor upward trendline, targeting a breakout above the major trendline, while sellers aim for a decline towards the 0.6350 support.<\/p>\n
That earlier summary highlights the delicate state of market expectations. The US dollar is treading water, sitting rather still against other major currencies. The earlier non-farm payrolls report came in softer than some expected, especially on the wage front. This slight underperformance left many questioning whether the chances of a third rate cut by the end of the year are now less likely. The dollar responded to this hesitancy by limiting any strong gains, without suffering heavy losses either. It’s in a kind of waiting room.<\/p>\n
With this behind us, attention now turns squarely to the upcoming consumer price index figures. Inflation remains the deciding factor for any meaningful move from the Federal Reserve. Even if this next CPI release comes in on the lower side, it’s unlikely\u2014based on what we’ve seen so far\u2014that the Fed will move as early as July. September, however, could be their moment, but only if inflation backs off and other economic data doesn\u2019t surprise to the upside. If price growth shows signs of weakening, the argument for rate cuts by December becomes stronger, and the dollar would weaken accordingly.<\/p>\n
If the CPI figures are stronger\u2014showing inflation is still sticky\u2014it wouldn’t necessarily cancel the chance of a second rate cut, but it probably would water down the case for a third. In that scenario, we\u2019d expect the dollar to find renewed strength, especially if investors begin to doubt that the Fed can justify more than one adjustment.<\/p>\n
Switching focus to the Australian dollar, domestic policy makers have held their main interest rate unchanged. They\u2019re in pause mode now, waiting for local CPI data to guide their hand. The technical picture supports this indecision. On the daily chart, price is sitting at the top of a broadening wedge\u2014a pattern that often precedes a strong directional move once one side runs out of steam. It\u2019s at this kind of edge where traders tend to act.<\/p>\n
We\u2019re watching carefully. Bears will take note of the repeated inability to break the upper trendline. Many are lining up short positions just under resistance, aiming for a return to the 0.6350 area\u2014a level that has held firm previously. It\u2019s not about emotion; it\u2019s about repeating patterns and disciplined risk.<\/p>\n
Meanwhile, bulls haven\u2019t thrown in the towel. They’re eyeing that same upper band of the wedge, hoping for a convincing break and close above it. If the price gets through that line with strength, it opens the door toward the 0.6900 marker, a psychological and historical level of interest.<\/p>\n
Take a closer look at the hourly chart and it starts to echo the broader pattern. There\u2019s a clear rejection from the upper edge, and it\u2019s driven a flurry of selling into the market. But the shorter-term upward trendline continues to hold, and buyers are stacking in just above it, probably adding tight stops underneath, looking to catch a sharper move upward if the pressure resolves in their favour.<\/p>\n
This moment is teetering. Resistance is holding\u2014for now\u2014but the base remains solid. The direction will come when price action tips the balance one way or the other. Until then, it remains a game of preparation, not prediction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD stable as traders assess rate cuts; CPI report key for future moves; AUD eyes RBA and CPI.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-26277","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=26277"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26277\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=26277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=26277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=26277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}