The 0.7100 Hurdle: Key Factors Driving AUD/USD's Range-Bound Trade as CPI Looms

Author: Zain Vawda

Date: 24 February 2026

Overview

The article discusses the current trading dynamics of the AUD/USD currency pair, which has been experiencing a range-bound trade around the 0.7040 – 0.7070 region. This stability comes amidst a backdrop of hawkish domestic policy expectations and increasing global trade uncertainties.

Current Market Conditions

Despite a resilient US Dollar, which has been bolstered by hawkish comments from the Federal Reserve, the Australian Dollar has managed to recover some losses from previous trading sessions. The AUD/USD pair has struggled to maintain momentum towards the 0.7100 level, which has become a significant hurdle since February 12.

Factors Influencing AUD/USD

Several key factors are currently influencing the AUD/USD exchange rate:

• Hawkish Reserve Bank of Australia (RBA): The RBA recently raised interest rates to 3.85% and indicated that the fight against inflation is ongoing. This has shifted the outlook for the AUD from bearish to cautiously constructive.
• Upcoming CPI Data: The market anticipates a sticky Consumer Price Index (CPI) print of 3.7% year-over-year, which is expected to provide a "yield floor" for the Australian Dollar.
• Chinese Economic Stability: The People's Bank of China has maintained its Loan Prime Rates, signaling a preference for stability over stimulus, which has helped to support the AUD.
• Trade Tensions: The potential for escalating trade tensions, particularly in light of the upcoming State of the Union speech, could impact market sentiment and favor the US Dollar over the AUD.

Technical Analysis

From a technical standpoint, the AUD/USD has remained range-bound for the past two weeks. Traders are hopeful that the upcoming CPI data could catalyze a movement beyond the 0.7100 level. A sustained break above this level is necessary for bullish momentum, while a downside break would need to clear the 100-day moving average before targeting recent lows around 0.7030.

Conclusion

The article emphasizes that the upcoming CPI release and the broader economic context will be crucial in determining the next directional move for the AUD/USD pair. Market participants are advised to remain vigilant as these factors unfold.