Published: 25 February 2026,07:48
Daily Market Analysis New
*The Australian dollar is holding above 0.7000—near 3-year highs versus the USD—while EURAUD and GBPAUD trade near yearly lows.
*The RBA’s February rate hike to 3.85% marked a clear pivot toward inflation control, with officials warning inflation remains too high.
*January CPI beat expectations, with headline inflation at 3.8% and core inflation at a 16-month high, strengthening the case for additional RBA tightening.
Market Summary:
The Australian dollar continues to trade on the front foot, holding firmly at elevated levels above the 0.7000 mark against its U.S. counterpart—a three-year high territory—while cross pairs such as EURAUD and GBPAUD hover near their yearly lows. The currency’s resilience comes despite recent U.S. dollar strength, underscoring the idiosyncratic support from domestic monetary policy developments and robust economic data.
The RBA’s hawkish pivot earlier this month, delivering a 25 basis point rate hike to 3.85 percent on February 3, marked a decisive end to the easing cycle and signaled the central bank’s commitment to containing persistent inflation pressures. The February meeting minutes revealed board members’ concern over inflationary risks and easing financial conditions, with officials reiterating a data-dependent approach to future policy decisions . Deputy Governor Andrew Hauser subsequently reinforced this stance, indicating that inflation remains “too high” and further tightening may be necessary .
Today’s CPI release from the Australian Bureau of Statistics has validated these concerns, with the monthly consumer price index rising 0.4 percent in January—exceeding the 0.3 percent forecast . The annual pace remained elevated at 3.8 percent, the highest level since July 2024, while the trimmed mean measure of core inflation accelerated to a 16-month high of 3.4 percent. This outcome keeps inflation above the RBA’s 2-3 percent target band for the seventh consecutive month and materially exceeds the central bank’s own projections.
The Australian dollar’s outperformance reflects this growing policy divergence with other major economies. While the Federal Reserve signals an extended pause and European growth concerns persist, the RBA’s explicit tightening bias and resilient domestic demand provide a compelling fundamental backdrop for further Aussie strength in the sessions ahead .
Technical Analysis
The AUDUSD pair has been consolidating at elevated levels, with bullish momentum pausing over the past week as price action compressed into a sideways trading range. The pair is now showing signs of an impending breakout from this consolidation phase, potentially signaling a resumption of the broader uptrend that has driven the Australian dollar to three-year highs.
The immediate technical focus is the resistance level at 0.7120. A sustained breakout above this threshold would constitute a strong bullish confirmation signal, likely attracting additional buying interest and positioning the pair for a challenge of higher resistance zones. Multiple analysts identify 0.7147 as the next significant target, with potential extension toward 0.7200 should momentum accelerate.
Momentum indicators offer a cautiously optimistic picture. The Relative Strength Index has rebounded from mid-range levels near 59.34 and is trending higher, with analysts suggesting a move above 65.00 would signal an acceleration phase. The pair holds well above its rising 50-day exponential moving average near 0.6890, confirming the broader bullish structure.
Resistance Levels: 0.7120, 0.7230
Support Levels: 0.7012, 0.6910
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