• Australia’s consumer inflation jumped by 2.3% in November.

• Underlying inflation in Australia dropped from 3.5% to 3.2%.

• US job openings unexpectedly rose in November to 8.10 million.

The AUD/USD forecast turned bearish on Wednesday after Australia’s inflation figures increased the likelihood of a February RBA rate cut. Meanwhile, the greenback was on the front foot after economic data in the previous session revealed continued resilience.

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Data from Australia early Wednesday showed that consumer inflation jumped by 2.3% in November. This number was above estimates of a 2.2% increase. However, market participants focused on the trimmed mean figure, which dropped from 3.5% to 3.2%, indicating softer underlying inflation.

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The Reserve Bank of Australia is waiting to see inflation in its target band of 2%-3%. Therefore, the drop was a welcome surprise. Traders raised the chances of a rate cut in February from 50% to 64%, leading to a sharp drop in the Australian dollar. 

On the other hand, the dollar remained firm after data in the previous session supported the outlook for a gradual Fed in 2025. Notably, job openings unexpectedly rose in November to 8.10 million, above estimates of 7.73 million. Demand in the US labor market has remained resilient despite high interest rates. As a result, policymakers have assumed a more cautious stance heading into 2025. 

Meanwhile, business activity in the services sector improved, with the PMI increasing to 54.1. Economists had expected a 53.5 reading. If data keep surprising, Fed rate cut bets will continue dropping. 

AUD/USD key events today

• US ADP non-farm employment change
• US unemployment claims
• FOMC Meeting Minutes

AUD/USD technical forecast: Bears fight to resume downtrend

On the technical side, the AUD/USD price has risen and fallen sharply in a whiplash move. It has broken below the 30-SMA support, and the RSI is trading slightly below 50. Therefore, bears have a slight upper hand. 

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Before this move, the price was on a downtrend that had paused near the 0.6200 support level. Price action indicated weaker enthusiasm to make new lows. At the same time, the RSI made a bullish divergence, suggesting fading bearish momentum. 

Consequently, bulls took charge by breaking above the 30-SMA. However, they met a solid hurdle at the 0.6300 resistance level, allowing bears to resurface. The previous downtrend will continue if AUD/USD breaks below the 0.6200 support. Otherwise, the price might consolidate.

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