AUD/USD edged higher on Thursday, but the move since June 30 looks more like a corrective bounce within a broader downtrend rather than a genuine reversal, meaning long positions in the pair now hinge on the upcoming U.S. June CPI report for validation.

Technically, the picture is mixed: AUD/USD sits above its rising 200-day moving average, a bullish signal, yet it is consolidating its decline from the June 15 high—a bearish sign. This consolidation is unfolding while the pair remains below its 21-day moving average and below key structural resistance in the 0.6980-0.7010 zone. If AUD/USD fails to break above this resistance soon, long holders may start exiting while bears add to short positions, a combination that could reignite the longer-term downtrend.

The critical catalyst is the U.S. June CPI report due Monday, July 14. If core inflation matches or comes in slightly below expectations, the U.S. dollar and Treasury yields

could fall as markets price in a less hawkish Fed , potentially fueling a sharp AUD/USD rally that clears the 0.6980-0.7010 resistance and targets the 0.7200 area.

Conversely, a hotter-than-expected inflation print could send the dollar and rates higher, triggering selling pressure on AUD/USD. In that scenario, the pair could break below its 200-day moving average and the June and March lows, shifting focus toward the 0.6675-0.6725 zone as the next downside target.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)