AUD/USD Rally Continues as Focus Shifts to Australian CPI Data

AUD/USD has extended its bullish momentum, climbing 0.5% to 0.6520 as the US dollar retreats from recent highs amid shifting market dynamics. The pair has gained over 120 pips from last week's lows, supported by a broad-based dollar unwind following mixed US economic signals and reduced expectations for aggressive Fed policy. Market attention now turns to Wednesday's Australian CPI release, with economists forecasting headline inflation at 2.5% year-over-year, potentially influencing RBA rate decisions. Technical indicators show the pair breaking above the 50-day moving average at 0.6500, with immediate resistance at 0.6550 and support established at 0.6480. A stronger-than-expected CPI reading could propel AUD/USD toward the 0.6600 psychological level, while disappointing inflation data might cap gains. The US Dollar Index has retreated 0.8% from recent peaks, providing additional tailwind for commodity currencies.