I remembered there was an interesting movement in AUD/USD back in February of last year. The pair hovered around 0.7100 and couldn't break higher. At that time, Westpac released consumer confidence data for Australia, and the index simply plummeted by 4.5% month-over-month to 82.1. This was already the third consecutive decline, so the market was clearly nervous.

What struck me was not just the numbers in the index. The sub-index for economic prospects over the next 12 months fell by 6.8%, and the indicator for purchasing big household items dropped by 5.1%. In other words, Australians stopped believing in the future and started saving. It makes sense that the Australian dollar was pushed down afterward.

At that time, Westpac's chief economist said all of this was due to pressure on the cost of living and uncertainty around RBA rates. The RBA was in a tough spot — consumer data was weakening, but the rate was still at 4.35%, while the Americans had it at 5.50%. That’s support for the dollar.

I was looking at the broader picture back then. Iron ore prices, Australia’s main export, also jumped due to concerns over demand in China. Plus, the whole world was seeking safe assets, and the US dollar was in favor. All of this together put pressure on the pair.

The 0.7100 level was a critical support that the pair tested several times in early 2025. If it had broken below, the next zone was in the 0.6800-0.6900 range. It’s interesting how everything developed afterward, but at that time, the consumer confidence index clearly indicated that things in Australia weren’t going very well.