AUD/USD rises as Australian inflation cools, RBA set to cut rates

AUD/USD has gained 0.5% to trade at 0.6765, buoyed by easing inflationary pressures in Australia and expectations of a rate cut by the Reserve Bank of Australia (RBA). The Australian Bureau of Statistics reported that the Consumer Price Index (CPI) rose 5.8% year-on-year in Q1 2025, down from 6.3% in the previous quarter and below the RBA's target range of 2-3%. Core inflation also moderated to 5.2% from 5.5%. The RBA is now widely anticipated to lower its cash rate by 25 basis points to 3.25% at its upcoming meeting to support economic growth. Technically, AUD/USD faces immediate resistance at 0.6800 (200-day moving average), followed by 0.6850. Support is located at 0.6720 (previous resistance turned support) and 0.6680. A sustained break above 0.6800 could signal further upside potential, while a dovish RBA could limit gains.