Australian Dollar stumbles near recent highs

• AUD/USD hovers in the 0.7050s, slipping from its recent high following a soft US inflation print.
• A flat US Producer Price Index cooled bets on further Fed tightening and pressured the Greenback.
• Hawkish remarks from the Fed's Hammack keep the Dollar's downside in check.

AUD/USD is trading little changed on Thursday, shrinking near the 0.7050s below the multi-week high reached on Wednesday near 0.7091. The pair holds its ground after US data pointed to cooling price pressure, keeping the US Dollar (USD) stagnant.

The US Producer Price Index (PPI) was flat on the month in July, coming in below expectations, while the annual pace eased and the core measures also softened. The prints trimmed bets on further Federal Reserve (Fed) tightening and dragged the Dollar broadly lower. A slightly higher-than-expected weekly Initial Jobless Claims reading added to the softer tone.

Cleveland Fed President Beth Hammack repeated her call to raise rates, telling a business audience the Fed needs "some restraint from monetary policy to bring down inflation" and that policy is not currently restrictive.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7055. The pair is sandwiched between the 20-period Simple Moving Average (SMA) at 0.7059 acting as immediate resistance and a cluster of nearby supports, keeping the near-term bias neutral. Price holds above the 100-period SMA at 0.7019, suggesting the broader 4-hour trend remains mildly constructive, while horizontal levels at 0.7053 and 0.7046 underpin the downside. Meanwhile, the Relative Strength Index (RSI) near 50 hints at consolidative momentum rather than directional conviction.

On the topside, initial resistance is seen at the horizontal barrier at 0.7058, followed closely by the 20-period SMA at 0.7059, with a stronger cap emerging at 0.7067. On the downside, support is located first at 0.7053, ahead of 0.7046, with the 100-period SMA at 0.7019 providing a more significant structural floor if the pair extends its pullback.

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