Been watching the Aussie Dollar bounce back nicely this week ahead of the RBA's rate call. The pair hit around 0.6970 against the US Dollar on Tuesday, and there's definitely some bullish momentum building here. What caught my attention is that despite the sharp 14.9% drop in building permits last month, the Aussie is still holding its ground pretty well.

The inflation picture is the real story though. Australia's CPI came in at 3.8% year-over-year in December, which is still above the RBA's 2-3% target. That's keeping the central bank cautious, and the labor market remains tight too. Meanwhile, job ads jumped 4.4% month-over-month in December, the strongest gain since early 2022, so hiring momentum is clearly picking up. Interestingly, when I convert 500 AUD to CAD at current rates, it's trading around 430-440 CAD depending on the exact spot price, showing how the Aussie has been relatively resilient against other major currencies beyond just the US Dollar.

From a technical standpoint, the AUD/USD is sitting above the 9-day moving average, which suggests the bulls are still in control. The RSI at 70 shows momentum is stretched but still bullish. I'm watching for a potential push toward 0.7094, which was the highest since February 2023. If it breaks down, the first support is around 0.6937. The Fed's cautious messaging hasn't helped the Dollar much lately, so that's working in the Aussie's favor too.