AUD/USD flirts with weekly lows near 0.6230 post US CPI
Source Fxstreet
- AUD/USD loses momentum and drops to nearly 0.6230.
- The Greenback remains well bid on firmer US CPI.
- US inflation figures came in above estimates in January.
The US Dollar caught a fresh wave of buying on Wednesday, vaulting the US Dollar Index (DXY) to weekly highs above 108.00. This surge put pressure on risk-sensitive currencies, including the Australian Dollar, and sparked a notable retreat in AUD/USD.
After enjoying two straight days of gains—and even briefly climbing past 0.6300 earlier in the session—the Aussie quickly gave up ground to trade in the low 0.6200 range.
Traders, in the meantime, remain focused on unexpectedly strong US inflation figures, with headline CPI up 3.0% YoY and core CPI rising 3.3% from a year earlier. These numbers seem to reinforce the Fed’s measured approach, echoing as well recent remarks by Chair Powell that the central bank won’t rush into any policy shifts.
Meanwhile, in Oz, Home Loans grew 4.2% in the October–December period, though Investment Lending for Homes dipped 2.9% during the same stretch.
Short-term technical views
AUD/USD is expected to face the next key contention at its 2025 bottom of 0.6087 (February 3). The loss of the region could open the door to a move to the key 0.6000 zone.
On the upside, initial resistance lies at the 2025 peak of 0.6330 (January 24), followed by the interim 100-day SMA at 0.6456 and the weekly top of 0.6549 (November 25).
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
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Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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