As mentioned earlier, the Aussie got hit really hard on the back of a very poor CPI print.

With all the pressure now shifting to the RBA to cut rates, the AUD/USD has declined over the course of today’s trade and continues to sit at the lows. Which is a clear sign of weakness.

UBS has come out and stated that they believe the RBA will cut in either July or August and we already had futures markets pricing in cuts around August.

With that in mind there isn’t anywhere for the Aussie to go back down and that really brings into focus the main levels below.

For now, we are sitting below 0.7050, which has been support in the past.

Clearly, 0.7000 is the massive barrier that the Aussie must break for there to be further downside. I would expect this to be defending to some degree and we haven’t traded at that level since the flash crash in early January. But at that time we never really traded there with any conviction. This time is clearly different.

If that level drops the lows sit at the round number levels which is where price will likely get sucked towards.