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15 October 2025,05:35

Daily Market Analysis

AUD Stabilizes Amid RBA Caution, Faces Pressure from Chinese Deflationary Data

15 October 2025, 05:35

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Key Takeaways:

*Meeting minutes reaffirmed a balanced but restrictive policy stance amid weak domestic consumption and softer labor and wage growth.

*Subdued Chinese CPI at -0.3% signaled ongoing deflation risks, dampening demand prospects for Australian exports and pressuring the Aussie.

*Upcoming employment figures on Thursday could drive volatility — strong results may offer short-term support, while weakness would deepen the bearish bias.

Market Summary:

The Australian dollar is trading in a relatively stable range, digesting the latest Reserve Bank of Australia (RBA) meeting minutes which reinforced the central bank’s cautious stance. The RBA noted that while current monetary policy settings are somewhat restrictive, they are being balanced against headwinds from ongoing weak domestic consumption and softer-than-expected labor and wage growth.

This domestic equilibrium, however, is being challenged by external pressures. The currency’s strength was hindered following the release of softer-than-anticipated inflation data from China, a critical trading partner for Australia. The Chinese Consumer Price Index (CPI) came in below market consensus, with a year-on-year reading of -0.3%, signaling persistent deflationary risks and sluggish domestic demand within the region. This data points to a potential slowdown in demand for Australian exports, thereby dampening the fundamental outlook for the Aussie dollar.

The currency is poised for a new round of volatility on Thursday with the release of Australia’s domestic employment data. A stronger-than-expected jobs report, particularly a lower unemployment rate, could provide temporary relief and stall the current bearish trend. Conversely, a worsening labor market condition would likely exacerbate the existing downside pressures on the currency, reinforcing the RBA’s dovish concerns.

Technical Analysis 

AUDNZD, H4

The AUDNZD pair has once again demonstrated resilience at a key technical level, finding solid support near the 1.1330 mark and staging a technical rebound. However, the broader price structure continues to favor the downside, as the pair remains confined within a series of lower highs, confirming its position within a defined downtrend trajectory.

For the current bearish bias to be invalidated, a decisive break above the most recent significant high at the 1.1395 level is required. Such a move would signal a potential reversal of the prevailing downward momentum and establish a more constructive near-term outlook.

Momentum indicators currently offer little directional conviction. The Relative Strength Index (RSI) is hovering neutrally around its mid-point, while the Moving Average Convergence Divergence (MACD) is flirting with its zero line. This confluence suggests a market in equilibrium, awaiting a fresh catalyst. The near-term direction will likely be determined by whether the pair can capitalize on its current rebound to challenge the 1.1395 resistance or if the underlying downtrend will reassert itself, leading to a re-test of the 1.1330 support.

Resistance Levels: 1.1413, 1.1480

Support Levels: 1.1340, 1.1270

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