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Commodity-linked currencies strengthened after US inflation data came in weaker than expected. The Consumer Price Index (CPI) slowed to 3.5% year-on-year in June, below the 3.8% forecast, while core inflation eased to 2.6% versus expectations of 2.8%. On a monthly basis, headline CPI unexpectedly fell by 0.4%, while core CPI was unchanged. The moderation in inflationary pressure increased expectations that the Federal Reserve may adopt a more accommodative policy stance, putting pressure on the US dollar and supporting both the Australian and Canadian dollars against the greenback.

However, despite the weaker US dollar, the next move in USD/CAD will largely depend on the Bank of Canada’s policy decision. Later today, the central bank will announce its interest rate decision, publish its updated Monetary Policy Report, and hold a press conference with the Governor. If policymakers maintain a cautiously hawkish tone on inflation, the Canadian dollar could receive additional support. Conversely, a more dovish message may limit CAD gains despite the broader weakness in the US dollar.

Market participants will also focus on the release of the US Producer Price Index (PPI), which will provide further insight into inflation trends following the softer CPI report. In addition, US crude oil inventory data could influence USD/CAD, as oil prices traditionally have a significant impact on the Canadian dollar.

AUD/USD The AUD/USD pair continues to develop the bullish engulfing reversal pattern. Yesterday, buyers managed to test the key resistance level around 0.7000. If the pair secures a sustained break above this level, the rally could extend towards the 0.7080–0.7130 area. The bullish scenario would be invalidated by a move below 0.6900.

Key events for AUD/USD:

Today at 14:00 (GMT+3): US MBA Mortgage Market Index Today at 15:30 (GMT+3): US Producer Price Index (PPI) Today at 15:45 (GMT+3): Speech by FOMC member John Williams

USD/CAD Following confirmation of the bearish tower top reversal pattern, selling pressure on USD/CAD intensified, reinforced by the weaker-than-expected US inflation data. As a result, the pair declined below 1.4100. Technical analysis suggests there is scope for a further move lower towards the 1.3960–1.4020 area. A decisive break back above 1.4120 could revive the bullish outlook.

Key events for USD/CAD:

Today at 16:45 (GMT+3): Bank of Canada interest rate decision Today at 17:30 (GMT+3): US Crude Oil Inventories Today at 17:30 (GMT+3): Bank of Canada press conference

Overall, the weaker US inflation report strengthened expectations of a more accommodative Federal Reserve, weighing on the US dollar and supporting commodity-linked currencies. However, the next moves in AUD/USD and USD/CAD will depend on upcoming economic data and the Bank of Canada’s policy guidance.

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The AUD/USD retreats slightly from the 0.6960 area, or a two-week high, touched during the Asian session on Tuesday, and, for now, seems to have snapped a three-day winning streak. The intraday downtick, however, lacks bearish conviction, warranting caution before confirming that a one-week-old recovery move from a three-month low has run out of steam.

From a technical perspective, the AUD/USD pair, so far, has been struggling to make it through the 38.2% Fibonacci retracement level of the November 2025-May 2026 rally. Furthermore, mixed momentum oscillators make it prudent to wait for a sustained move beyond the said barrier before positioning for an extension of the recent bounce from the very important 200-day Simple Moving Average (SMA) support near 0.6870.

In fact, the Moving Average Convergence Divergence (MACD) has turned slightly positive, hinting at a slight improvement in the upside momentum. However, the Relative Strength Index (RSI) near 42 suggests only modest directional pressure, consistent with a consolidative bias around current levels, warranting some caution for aggressive bullish traders as renewed tensions in the Strait of Hormuz support the US Dollar.

Meanwhile, initial support emerges at the 50% retracement at 0.6853, ahead of a deeper structural floor at the 61.8% Fibo. near 0.6752, with 0.6608 and 0.6425 marking subsequent retracement and cycle-low supports if selling extends. On the topside, a break above the 38.2% Fibo. at 0.6954 would open the way toward the 23.6% retracement barrier at 0.7079, while the cycle high around 0.7282 stands as a more distant objective should bullish momentum gain traction.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

AUD/USD daily chart

Australian Dollar Price Last 7 Days The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 7 days. Australian Dollar was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.13%-0.99%-0.10%0.04%-0.83%-0.85%-0.25%EUR0.13%-0.88%0.04%0.15%-0.71%-0.66%-0.12%GBP0.99%0.88%0.93%1.01%0.15%0.21%0.75%JPY0.10%-0.04%-0.93%0.17%-0.69%-0.64%-0.18%CAD-0.04%-0.15%-1.01%-0.17%-0.87%-0.80%-0.28%AUD0.83%0.71%-0.15%0.69%0.87%-0.01%0.59%NZD0.85%0.66%-0.21%0.64%0.80%0.01%0.51%CHF0.25%0.12%-0.75%0.18%0.28%-0.59%-0.51% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).