• The AUD/USD price analysis indicates solid wage growth in Australia.
• Market participants are still pricing an RBA rate cut in May.
• The US CPI increased by 0.2% in April, compared to forecasts of 0.3%.

The AUD/USD price analysis indicates solid wage growth in Australia that is propelling the Australian dollar higher. At the same time, the US dollar remains fragile after collapsing in the previous session due to downbeat inflation data. 

The Aussie rose on Wednesday after data revealed that Australia’s wage price index increased by 0.9% in Q1. This figure was bigger than the forecast of 0.8% and reflected strength in the labor market. More employment data will come on Thursday. However, market participants are still pricing an RBA rate cut in May. Cooling inflation and global growth worries have solidified bets for a cut. 

Meanwhile, the dollar remained weak after inflation figures on Tuesday missed forecasts. According to data, the US CPI increased by 0.2% in April, compared to forecasts of a 0.3% increase. Meanwhile, the annual figure increased by 2.3%, below estimates of a 2.4% increase. The downbeat figures increased pressure on the Fed to lower borrowing costs. 

However, policymakers might remain cautious, waiting to see whether Trump’s tariffs boosted price pressures. Nevertheless, the outlook for the future has improved since China and the US agreed to slash tariffs.

AUD/USD key events today 

Market participants do not expect any more key economic releases from Australia or the US. 

AUD/USD technical price analysis: Bulls to challenge the 0.6500 

(Click on image to enlarge)

AUD/USD 4-hour chart

On the technical side, the AUD/USD price has broken back above the 30-SMA after failing to break below the 0.6351 key support level. Initially, the price was trading in a bullish trend above the 30-SMA. However, momentum started fading when the price reached the 0.6351 key level. Although bulls made a new high near the 0.6500 key psychological level, the price continued chopping through the SMA.

During the most recent swing, bears failed to break below the 0.6351 support, allowing bulls to return stronger. The price now sits above the SMA with the RSI nearing the overbought region. Given the solid bullish bias, AUD/USD might soon retest the 0.6500 resistance level. 

A break above would strengthen the bullish bias and continue the previous uptrend. On the other hand, if the resistance holds, the price might remain in consolidation.

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