AUD/USD drops below 0.7100 as crucial CPI figures and a tariff reset approach.
The AUD/USD slipped from the 0.7100 psychological barrier to around 0.7045 in early Asian trade. The move reflects heightened risk aversion ahead of the US CPI release and rumors of a tariff policy reset. These dual catalysts are reshaping expectations for both the Australian and US economies and may steer the pair’s quarterly trajectory. The pair fell about 0.8%, now testing the 50‑day moving average near 0.7020. A break below could open a path to the 0.6950 support zone, while 0.7100 remains key resistance. The RSI has shifted from overbought to neutral, signalling waning momentum. US CPI is forecast at 3.1% YoY with core inflation at 3.7%, likely keeping the Fed’s rates higher and strengthening the dollar. A potential US tariff reset on Chinese imports could curb Chinese demand for Australian commodities, further boosting safe‑haven demand for USD. Leveraged funds have trimmed net long AUD positions and overall market sentiment has moved from greed to neutral, indicating heightened downside risk.























