The Australian dollar continued to face selling pressure during Thursday's Asian session. The strengthening US dollar and the absence of further stimulus measures from China weighed on the currency pair.

On Thursday, the US CPI inflation data will be in focus. The Australian dollar (AUD) extended its decline on Thursday. Amid intensifying speculation over a 25 basis points (bps) rate cut by the US Federal Reserve (Fed) in November, the strengthening US dollar (USD) weakened the Aussie. Moreover, Beijing's attempts to stimulate the world's second-largest economy disappointed investors, as China's top economic planning agency failed to announce further measures to improve lackluster growth. It is noteworthy that China is Australia's main trading partner, and concerns about China's economic downturn often have a negative impact on the value of the Australian dollar. Investors will closely monitor the key US Consumer Price Index (CPI) inflation data due later on Thursday. The US overall CPI for September is expected to rise by 2.3% year-on-year, while the core CPI inflation rate is projected to increase by 3.2% over the same reporting period. However, if the report shows results weaker than expected, this could pave the way for a significant rate cut by the Fed, which could打压 the US dollar and limit the downside for AUD/USD.

Daily summary market movers: Aussie weakens ahead of US CPI data

Minutes from the Reserve Bank of Australia's September meeting showed that board members ignored warnings of no rate cuts in the near term. The Australian central bank wants to keep its options open and observe whether the economy begins to warm up in the second half of the year.

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"This opens the door to turning neutral by the end of this year and then easing in early 2025," ANZ analysts pointed out. We continue to expect the first cash rate cut in February 2025.

The World Bank predicted in its economic update released on Tuesday that China's growth rate would slow from the projected 4.8% this year to 4.3% by 2025.

San Francisco Fed President Mary Daly said on Wednesday that there could be one or two more rate cuts this year if the economy develops as she expects, adding that she is now "very confident" that inflation is moving towards the Fed's 2% target.Boston Federal Reserve President Susan Collins stated on Wednesday that the Federal Reserve is highly likely to implement additional rate cuts as inflation trends weaken further. According to the CME FedWatch tool, the market has already priced in a nearly 80% possibility of a 25 basis point (bps) rate cut by the Federal Reserve in November, up from 31.1% last week.

Technical Analysis: The Australian Dollar Remains Fragile Near Key Support Levels

The Australian Dollar softened on the day. Technically speaking, the bullish outlook for the AUD/USD currency pair appears fragile as the pair hovers near the lower bound of the uptrend channel and the key 100-day Exponential Moving Average (EMA) on the daily chart. Should the AUD/USD break below the aforementioned levels, this could resume its downside trajectory. The 14-day Relative Strength Index (RSI), located below the midline at 41.20, reinforces the downward momentum. The key support level for AUD/USD is seen at 0.6700, representing the lower bound of the trend channel, the 100-day EMA, and a psychological level. A breakthrough at this level could pave the way for the September 11 low of 0.6622. On the other hand, the September 6 high of 0.6767 is the immediate resistance for the currency pair. Further north, the next upward obstacle is located at the August 29 high of 0.6823, followed by the September 30 high of 0.6942.