AUD/USD Weakens as Australian Inflation Drop Boosts RBA Cut Expectations

AUD/USD has come under pressure following a significant decline in Australian inflation data, strengthening the case for Reserve Bank of Australia rate cuts. The softer-than-expected inflation figures have shifted market expectations toward a more dovish RBA stance, weighing on the Australian dollar. The currency pair faces additional headwinds from broad USD strength and concerns about global growth prospects. Technical analysis shows AUD/USD testing key support levels, with further declines possible if inflation continues to moderate. The ASX 200 has shown mixed reactions, balancing between rate cut optimism and currency weakness concerns. Traders are now pricing in increased probability of RBA easing in coming months, which could cap any AUD recovery attempts. Near-term resistance emerges at recent highs, while extended support lies at multi-month lows as markets reassess Australia's monetary policy trajectory.