• AUD/USD held firm on Wednesday as improved risk appetite stemming from the ongoing Israel-Iran ceasefire offset the impact of weaker-than-expected Australian inflation figures.
• The ceasefire negotiated by U.S. President Donald Trump between Iran and Israel remained intact on Tuesday, as both nations declared victory following 12 days of intense conflict..
• Australia’s monthly consumer price index fell by 0.4% in May, bringing the annual inflation rate down to 2.1%—below market expectations of 2.3%.
• The trimmed mean measure of core inflation dropped sharply to 2.4% in May, marking its lowest level since late 2021 and falling below the midpoint of the Reserve Bank of Australia's 2–3% target range.
• The weaker-than-anticipated inflation data has bolstered market expectations that the Reserve Bank of Australia (RBA) will adopt a more accommodative stance at its upcoming policy meeting on July 8.
• Immediate resistance is located at 0.6538(23.6%fib), any close above will push the pair towards 0.6576(Higher BB).
• Support is seen at 0.6423(38.2%fib) and break below could take the pair towards 0.6406(Lower BB).
Recommendation: Good to buy around 0.6480 with stop loss of 0.6390 and target price of 0.6560
