The AUDUSD rate reversed to the upside, rising to 0.6450 amid weaker-than-expected US inflation. Discover more in our analysis for 16 May 2025.
AUDUSD forecast: key trading points
- Market focus: US inflation is falling, with the April Producer Price Index (PPI) at 2.4% (projected at 2.5%)
- Current trend: trending upwards
- AUDUSD forecast for 16 May 2025: 0.6500 and 0.6400
Fundamental analysis
AUDUSD quotes have reversed upwards and are rising, as the recently released US economic data showed a slower pace of inflation than expected. This has increased the likelihood of further Federal Reserve interest rate cuts this year.
The Reserve Bank of Australia is set to decide on the key interest rate next week. Markets expect the central bank to lower the rate by 25 basis points to 3.85%. At the same time, analysts have revised their forecast for total rate cuts this year down to 75 basis points, from over 100 basis points a few weeks ago.
Recent data also revealed a sharp rise in Australian employment in April, while the unemployment rate held steady, highlighting the resilience of the labour market.
AUDUSD technical analysis
The AUDUSD pair has reversed upwards on the H4 chart after rebounding from the 0.6400 support level. The Alligator indicator is also attempting to turn upwards, suggesting the downward correction may be ending. A Triangle pattern could form, with the potential for further growth towards the 0.6600 area.
Today’s AUDUSD forecast expects the pair to continue rising towards the 0.6500 resistance level if bulls maintain control. However, if bears push the price below 0.6400, the downward correction could resume with a potential drop towards 0.6300.
Summary
The AUDUSD rate reversed to the upside, rising to the 0.6450 area as US inflation cooled. Market participants now look ahead to next week’s RBA rate decision.
