Key takeaways Canada inflation & BoC stance: July CPI accelerated to 3.0% YoY, pressuring USD/CAD in the short term, but the Bank of Canada maintains a cautious stance as underlying core metrics continue to moderate.Australian labor & RBA dilemma: A sharp contraction in employment pushed unemployment to 4.5%, yet sticky core inflation keeps the RBA constrained in a “higher-for-longer” stance at 4.35%.FOMC minutes & rate expectations: Despite hawkish July minutes, markets looked past the rhetoric toward cooler data, with FedWatch pricing for September rate targets rebounding into the 60%–70% range by late August.Major currency dynamics: Major pairs rallied against the U.S. dollar during the week of August 17–21, led by NZD/USD (+1.57%) and AUD/USD (+1.33%). Canada inflation acceleration & Bank of Canada policy stance For the week of August 17th, 2026, Statistics Canada released the July CPI report, showing headline inflation accelerating to 3.0% YoY—beating forecasts — driven by surging gasoline and travel costs, while underlying core metrics remained relatively subdued. In response, the Canadian dollar strengthened immediately, pushing USD/CAD down roughly 0.2% to 1.3850 on the day.
Canada CPI Source: Bloomberg Finance L.P. Past performance is not indicative of future results Despite the headline beat, Bank of Canada (BoC) policymakers maintain a cautious forward stance. The Governing Council is actively balancing near-term inflationary persistence—driven by upticks in the energy and services components—against emerging downside risks to domestic growth, including softer household consumption and elevated debt-servicing costs. While the 3.0% YoY CPI print temporarily suppresses immediate market expectations for aggressive monetary easing, underlying core metrics (CPI-median and CPI-trim) suggest that broader price pressures continue to moderate toward the 2% target band. Consequently, money markets are pricing in a higher probability of a prolonged policy hold, with rate-cut projections shifted further out along the yield curve as central bankers await further confirmation of sustained disinflation before committing to additional policy adjustments.
Australian labor cooling & RBA monetary policy dilemma This week’s Australian labor force data revealed a surprise cooling in the job market, as headline employment declined by 15,800 jobs in July, significantly missing market forecasts and reversing the previous month’s gain of 80,000 jobs. This contraction was driven entirely by a sharp reduction in part-time roles, which pushed the unemployment rate up to 4.5%—its highest level since late 2021—and contributed to a 0.6% drop in total hours worked. Consequently, the Australian dollar (AUD) faced downward pressure following the report, as investors interpreted the data as a sign of a weaker economic environment, leading the market to dial back expectations for further interest rate hikes from the Reserve Bank of Australia.
However, the initial downward pressure on the Australian dollar proved short-lived, as the currency subsequently staged a strong recovery alongside the broader rally against the U.S. dollar later in the week.
Australia CPI Source: Bloomberg Finance L.P. Past performance is not indicative of future results The Reserve Bank of Australia (RBA) finds itself navigating a classic monetary policy dilemma—managing a cooling labor market while stickier price pressures persist. With core inflation, trimmed mean, and weighted median elevated at around 3.6% and headline inflation at 3.8%, both remain above the bank’s 2%–3% target band. However, with the unemployment rate creeping up to 4.5% and net job growth turning negative in July, the RBA is constrained from hiking interest rates further without risking a sharper economic downturn. As a result, the RBA is likely to maintain a “higher-for-longer” policy hold at 4.35%.
FOMC minutes hawkishness & Fed rate probability shifts The release of the July FOMC meeting minutes revealed a distinctly hawkish division among Federal Reserve officials, highlighted by three dissents favoring an immediate 25-basis-point rate hike and strong warnings regarding upside risks to inflation. Despite this hawkish rhetoric, the foreign exchange market reacted with broad, modest U.S. dollar selling as traders largely dismissed the minutes as backward-looking. Investors prioritized subsequent economic data showing cooling inflation and job losses over the Fed’s July sentiments, shifting their focus toward upcoming commentary at the Jackson Hole Symposium for clearer forward-looking guidance.
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CME Fed watch tool - FOMC September 2026 meeting probabilities Source: CME Group Past performance is not indicative of future results The CME FedWatch tool chart shows that after plunging to a multi-month low near 20% in late July, the market-implied probability of a 350–375 bps target rate at the September 16, 2026, meeting rebounded sharply throughout August. The probability climbed back toward the 60%–70% range by August 21st, reflecting shifting interest rate expectations as traders recalibrated the likelihood of a Fed rate cut in response to incoming economic data and central bank communications over the month.
Major currency pair dynamics relative to the U.S. dollar TradingView currency performance Source: Tradingview.com Past performance is not indicative of future results Over the past trading week (August 17–21), major currencies rallied sharply against the U.S. dollar, driven by a broad mid-week greenback sell-off on August 19 as markets looked past hawkish Fed minutes toward cooler U.S. economic data. The New Zealand Dollar (NZD/USD) led gains across the board, extending its advance to +1.57% after recovering aggressively from early-week lows. The Australian Dollar (AUD/USD) followed with a +1.33% gain, while the Euro (EUR/USD) held solid strength at +1.01%. Meanwhile, the Canadian Dollar (CAD/USD) rose +0.82%, supported by earlier domestic inflation strength, and the British Pound (GBP/USD) settled at a +0.80% gain as major pairs maintained their elevated levels heading into the end of the week.
Conclusion In summary, the week of August 17–21 highlighted diverging monetary policy dynamics and shifting market expectations across major central banks. While Canada’s headline CPI uptick provides short-term support for CAD despite underlying disinflation, Australia’s cooling labor market contrasts with persistent core inflation, keeping the RBA on a cautious hold. Meanwhile, markets largely looked past hawkish FOMC minutes and priced in a higher probability of September Fed rate cuts, driven by softer economic indicators, driving broad gains across major currency pairs relative to the U.S. dollar.
With over 15 years' experience in the forex markets, on both the research and client relations sides, Moheb specialises in technical, trade-focused market analysis. He has worked at a number of top financial institutions, publishing daily commentary and driving sales for retail and institutional clients. A CMT Charter member, Moheb holds a globally recognised CFTe designation.
With over 15 years' experience in the forex markets, on both the research and client relations sides, Moheb specialises in technical, trade-focused market analysis. He has worked at a number of top financial institutions, publishing daily commentary and driving sales for retail and institutional clients. A CMT Charter member, Moheb holds a globally recognised CFTe designation.
The Aussie Dollar finished the week with gains of over 0.82% on Friday and up more than 1.20% for the week as the US Dollar tumbled following the US Treasury Department's announcement of a bond buyback for the long end of the curve. The AUD/USD trades at 0.7170, after rebounding near 0.7067.
AUD/USD price action indicates that the uptrend resumed after the pair reclaimed the 100-day Simple Moving Average (SMA) at 0.7969. In addition, a breakout above the June 4 daily high of 0.7149 opened the door for further gains.
The Relative Strength Index (RSI) indicates bullish momentum. Hence, the path of least resistance is tilted to the upside, meaning that bulls are piling in search of higher prices.
The AUD/USD's first supply zone is the May 29 high of 0.7200. If breached, this clears the path to challenge the year-to-date (YTD) high of 0.7227. On further strength, the next area of interest would be 0.7300.
Conversely, if bears move in and drag prices below 0.7100, a move towards the 100-day SMA at 0.7069 is on the cards. On further weakness, the next support is the 50-day SMA at 0.6999.
Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
AUD/USD edges higher on Friday, climbing to its highest level since June 3 as the Australian Dollar (AUD) outperforms all its major peers. A broadly weaker US Dollar (USD), strength across the commodity complex led by rising Gold (XAU/USD) prices, and the Reserve Bank of Australia’s (RBA) hawkish policy stance boost the commodity-linked Aussie.
At the time of writing, AUD/USD trades around 0.7167, up 0.77% on the day and on track for an eighth consecutive weekly gain. The intraday advance comes even as the US Dollar shows signs of stabilizing after its recent weakness. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 98.82 after recovering from an intraday low of 98.56.
Australian Dollar Price Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.03%-0.02%-0.13%-0.78%-0.51%0.16%EUR-0.03%-0.00%-0.07%-0.20%-0.82%-0.53%0.13%GBP-0.03%0.00%-0.07%-0.19%-0.80%-0.54%0.14%JPY0.02%0.07%0.07%-0.11%-0.76%-0.50%0.19%CAD0.13%0.20%0.19%0.11%-0.65%-0.37%0.30%AUD0.78%0.82%0.80%0.76%0.65%0.26%0.95%NZD0.51%0.53%0.54%0.50%0.37%-0.26%0.69%CHF-0.16%-0.13%-0.14%-0.19%-0.30%-0.95%-0.69% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
The technical outlook also supports the bullish case, with AUD/USD forming a steady sequence of higher highs and higher lows since rebounding from the mid-0.6800s in late June.
Technical analysis
AUD/USD keeps a bullish near-term tone as it holds above the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) clustered between 0.6952 and 0.7070.
The Relative Strength Index (RSI) on the daily chart is at 69 and flirts with overbought territory, while the Moving Average Convergence Divergence (MACD) indicator remains slightly positive, suggesting the latest advance is stretched but still supported by constructive momentum within a relatively low-trend ADX backdrop.
On the topside, initial resistance emerges at the horizontal barrier near 0.7200, ahead of a higher cap at 0.7300. On the downside, immediate support is provided by the latest close area at 0.7166, with deeper demand seen at the 100-day SMA around 0.7070 and the 50-day SMA near 0.6999, before the 200-day SMA at 0.6952 and the structural floor at 0.6850.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
RBA FAQs The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
Gold stays poised to post third straight week of gainsUS Treasury move risks creating unintended consequences for markets and the economyWhy markets care more about the signal than the size of the Treasury buybackHow have interest rate expectations changed after this week's events?Stock market sector rotation explained: Where investors are moving their money nowECB's Kazāks says September decision will be based on data, adds there are pros and cons to hiking furtherFrench business activity contracts further in August as demand conditions remain subduedGermany August flash manufacturing PMI 54.1 vs 52.0 expectedEuro area business activity sees further pick up in August despite France, Germany softnessUK August flash services PMI 52.8 vs 51.8 expectedUK retail sales fall in July as early summer buzz fadesMarkets:
AUD leads, USD lags on the dayGold up 1.7% to $4,596WTI crude oil up 0.4% to $87.20US 10-year yields down 0.6 bps to 4.692%European indices slightly higher; S&P 500 futures up 0.4%Bitcoin up 6.6% to $77,502Markets continue to debate the US Treasury decision to double long-term debt buybacks this week, with the dollar falling off again as Treasury yields stall after a bounce yesterday.
10-year yields in the US climbed back to 4.70% while 30-year yields pushed to 5.25% before easing back a little and that is sustaining the relief as the "Bessent put" stays in place. In turn, the dollar is seen falling across the board with EUR/USD testing waters above 1.1700 and GBP/USD hitting fresh 6-month highs of 1.3660. Elsewhere, USD/JPY is down 0.3% to 158.60 while AUD/USD is up 0.8% to 0.7165 on the day.
In terms of economic data releases, euro area PMI data saw France and Germany disappoint but the overall Eurozone data was more positive in being carried by a better showing by the rest of the region. Menawhile, UK PMI data was also more positive but it also saw inflation pressures ramp up. So, there's that.
But in terms of market impact, the PMI data didn't do much. It's all on the continued focus on the reaction to the US Treasury move from earlier this week.
Gold is the biggest winner it would seem, climbing further to briefly clip $4,600 earlier and still up by 1.7% to $4,596 currently. Silver also briefly touched $70 and is up 2.6% to $69.90 at the moment.
In other markets, equities are looking to find a steadier footing to close out the week with European indices up a little while Wall Street looks to bounce back from yesterday's setback. S&P 500 futures are up 0.4% while Nasdaq futures are up 0.6%.
And quietly, we're also seeing cryptocurrencies surge higher again in extending gains from earlier this week with Bitcoin keeping above $77,000.
The AUD/USD pair regains positive traction following the previous day's dismal Aussie jobs data-led modest fall and climbs to a fresh high since early June during the first half of the European session. Spot prices currently trade just below mid-0.7100s, up nearly 0.50% for the day, and remain on track to register gains for the seventh week in a row amid a supportive fundamental backdrop.
The US Dollar (USD) languishes near a three-month low, touched on Thursday, amid receding bets for an immediate rate hike by the Federal Reserve (Fed), which, in turn, is seen as a key factor supporting the AUD/USD pair. Bulls, meanwhile, seem rather unaffected by geopolitical uncertainties stemming from the US-Iran standoff over the Strait of Hormuz, suggesting that the path of least resistance for spot prices remains to the upside.
From a technical perspective, the latest leg up confirms a fresh breakout above the 61.8% Fibonacci retracement level of the May-June decline. Moreover, the Relative Strength Index (14) near 67 suggests stretched but still constructive momentum and is backed by a mildly positive Moving Average Convergence Divergence (MACD) reading above zero. The set-up, in turn, further validates the near-term positive outlook for the AUD/USD pair.
Meanwhile, the 78.6% Fibo. retracement at 0.7188, which might cap the advance for now. A sustained move beyond the said hurdle is needed to open the way toward higher recovery targets. On the downside, initial support is located at the 61.8% retracement at 0.7119, ahead of a stronger structural floor formed by the 50.0% retracement at 0.7070 and the nearby 100-day SMA at 0.7069. A break below this cluster would likely trigger a deeper pullback toward the 38.2% level at 0.7021 and the 23.6% retracement at 0.6961, if selling accelerates.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Australian Dollar Price This week The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-1.12%-0.91%-0.25%-0.80%-0.81%-1.27%-1.48%EUR1.12%0.36%0.87%0.32%0.27%-0.16%-0.36%GBP0.91%-0.36%0.59%-0.01%-0.09%-0.52%-0.77%JPY0.25%-0.87%-0.59%-0.53%-0.61%-1.03%-1.25%CAD0.80%-0.32%0.01%0.53%-0.07%-0.50%-0.74%AUD0.81%-0.27%0.09%0.61%0.07%-0.43%-0.68%NZD1.27%0.16%0.52%1.03%0.50%0.43%-0.26%CHF1.48%0.36%0.77%1.25%0.74%0.68%0.26% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
The Australian Dollar fell immediately after a weak employment report before recovering as broader US Dollar softness limited the damage to AUD/USD. The Australian Dollar came under pressure after Australia's July labour-market report showed an unexpected fall in employment and unemployment at its highest level in almost five years.
Employment dropped by 15,800 against expectations for a gain of around 15,000, while the unemployment rate rose to 4.5%.
Image: AUD crosses today Australian jobs data The Australian Dollar to US Dollar (AUD/USD) exchange rate fell towards 0.7111 immediately after the release before recovering to around 0.7126 later in the morning.
At that later level, the pair was marginally higher on the day, underlining the importance of distinguishing the initial Australian data reaction from subsequent US Dollar weakness.
Jobs Data Eases Pressure on RBA Full-time employment still increased by 16,300, but participation slipped to 66.9% and total hours worked fell 0.6%.
The softer headline reduces pressure on the Reserve Bank of Australia to tighten policy again quickly.
Westpac economist Ryan Wells had already highlighted “the rising trend in unemployment and underemployment” as evidence that labour-market slack was building.
Oxford Economics Australia chief economist Ben Udy said the July figures were slightly weaker than the RBA had expected and, alongside slower wage growth, reduced near-term pressure for another increase.
Markets remain divided over whether the RBA will need another increase later this year, particularly with inflation still uncomfortable.
Image: AUD/USD intraday chart For the AUD/USD exchange rate, the immediate support zone sits around 0.7100, while the August high near 0.7129 is the first upside test.
A renewed break below 0.7100 would suggest the labour-market disappointment is beginning to dominate the broader Dollar story.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
AUD/USD holds firm near a two-and-a-half-month high on Wednesday, supported by broad US Dollar (USD) weakness, while technical indicators point to further upside. At the time of writing, the pair trades around 0.7118, up 0.43% on the day, after reaching an intraday high of 0.7129.
The US Dollar Index (DXY), which gauges the Greenback's value against a basket of six major currencies, trades near 98.90, down 0.75% on the day and touching its lowest level since May 29.
Strategists at Rabobank "continue to see scope for a shallow uptrend in AUD/USD into next year," with the move higher expected to be "aided by November RBA rate hike risk" and underpinned by Rabobank’s call that "the Fed will avoid tightening policy this year."
Australia’s employment report, due on Thursday, could provide fresh direction for the pair. The economy is expected to add 15K jobs in July, following a gain of 76.3K in June, while the Unemployment Rate is forecast to stay unchanged at 4.4%.
Technical Analysis
AUD/USD maintains a bullish near-term bias as spot holds above the 21-, 50-, 100- and 200-day Simple Moving Averages (SMAs) clustered between roughly 0.6946 and 0.7065.
The Relative Strength Index (RSI) on the daily chart is near 65, suggesting firm but not extreme upside momentum, while the Moving Average Convergence Divergence (MACD) indicator remains slightly positive, hinting that buyers still control the short-term tone as the pair edges towards overhead resistance.
On the topside, the 0.7150-0.7200 region forms a strong resistance zone. A clear break above this area could open the door to a retest of this year’s peak near 0.7270.
On the downside, immediate support is seen at the recent close around 0.7118, followed by the 100-day SMA at 0.7065 and the 21-day SMA at 0.7036, before deeper demand is expected around the 50-day SMA at 0.6996 and the longer-term 200-day SMA at 0.6946.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
The Australian Dollar (AUD) underperforms its major currency peers on Wednesday, trading 0.17% lower at around 0.7070 against the US Dollar (USD) during the European trading session. The antipodean faces selling pressure even as Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser has kept the door open for further monetary policy tightening.
Australian Dollar Price Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.18%-0.14%-0.24%-0.15%0.23%0.04%-0.22%EUR0.18%0.03%-0.09%0.06%0.39%0.19%-0.04%GBP0.14%-0.03%-0.11%0.02%0.38%0.18%-0.09%JPY0.24%0.09%0.11%0.11%0.46%0.27%0.00%CAD0.15%-0.06%-0.02%-0.11%0.35%0.16%-0.10%AUD-0.23%-0.39%-0.38%-0.46%-0.35%-0.18%-0.43%NZD-0.04%-0.19%-0.18%-0.27%-0.16%0.18%-0.25%CHF0.22%0.04%0.09%-0.01%0.10%0.43%0.25% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Earlier in the day, RBA’s Hauser said, “Inflation is too high, and the central bank needs to raise interest rates to bring price pressures down.” Hauser added, “Monetary policy needs to bring inflation down and reduce demand in the economy.”
Meanwhile, the US Dollar also trades lower as fears of a Federal Reserve (Fed) interest rate hike in the September meeting have receded due to weak United States (US) data for July.
Later in the day, investors will focus on the Federal Open Market Committee (FOMC) minutes of the July policy meeting, which will be published at 18:00 GMT.
In Australia, investors will focus on the Aussie employment data for July, which will be released on Thursday.
AUD/USD Technical Analysis
AUD/USD trades at 0.7073, holding a constructive near-term bullish bias as spot remains above the 20-period exponential moving average (EMA) at 0.7045, suggesting buyers retain control on dips.
The Relative Strength Index (14) at 57.6 stays in positive territory without being overbought, hinting that upside momentum is present but not stretched.
On the downside, immediate support is seen at the 20-day EMA at 0.7045, where fresh buying interest could emerge if the pair retreats. On the upside, the August 17 high at 0.7129 is the key hurdle for the pair.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator FOMC Minutes FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Read more.
Next release: Wed Aug 19, 2026 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
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Standard Chartered targets AUD/USD at 0.74 in three months and 0.75 in a year, with the RBA, China and commodities offering support. The Australian Dollar to US Dollar (AUD/USD) exchange rate is forecast to rise to 0.74 in three months and 0.75 over 12 months by Standard Chartered.
AUD/USD was trading near 0.7114 late on Monday, up about 0.42% on the day and 6.66% in 2026.
AUD/USD six-month closing-price chart with 20-day and 50-day moving averages. The RBA remains a key support “The RBA's decision to hold its official cash rate at 4.35% was accompanied by a hawkish policy message,” Standard Chartered said.
That message reinforces the prospect that Australian interest rates remain restrictive for longer, while Governor Michele Bullock has repeated that rates could rise again if required.
The bank also identifies a softer US Dollar, improving Chinese growth momentum and supportive commodity conditions as tailwinds for the Australian currency.
Gold supplies an additional, but explicitly secondary, signal.
Standard Chartered calculates that the correlation between XAU/USD and AUD/USD has risen to +0.82 over three months, compared with +0.59 over three years.
“The 0.23-point gap shows that gold and the AUD have moved much more closely together recently,” the report said.
That observation does not show that a higher gold price causes AUD/USD to rise.
Both markets can respond to the same forces, including the Dollar, global risk appetite and commodity demand.
Standard Chartered therefore cautions that “gold should still be treated as a supporting indicator rather than the primary AUD driver.”
The distinction keeps the forecast anchored in Australian and global macro conditions rather than a single cross-asset relationship.
Near-term price action is consistent with a constructive bias, but the distance to 0.74 remains meaningful.
From 0.7114, the three-month target requires a gain of roughly 4%, while the 0.75 one-year target implies an advance of just over 5%.
If gold's short-run correlation falls back towards its longer-term average, Standard Chartered's own framing suggests that would weaken a supporting signal rather than invalidate the entire forecast.
The one-year horizon also gives the bank more time for China and commodity demand to offset any short-lived change in the Dollar.
The first checkpoint is 0.74 in three months; reaching it requires the RBA and external demand to remain supportive even if the gold correlation normalises.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Weekly Technical Trade Levels on USD Majors, Commodities & Stocks
Technical trade setups we are tracking into the start of the week on the USD Majors, commodities, and equity indices.
Next Weekly Strategy Webinar: Monday, August 24 at 8:30am ET
Review the latest Video Updates or Stream Live on my YouTube playlist
In this webinar we take an in-depth look at the technical trade levels for the US Dollar (DXY), Euro (EUR/USD), British Pound (GBP/USD), Australian Dollar (AUD/USD), Canadian Dollar (USD/CAD), Japanese Yen (USD/JPY), Swiss Franc (USD/CHF), Gold (XAU/USD), Crude Oil (WTI), Bitcoin (BTC/USD), S&P 500 (SPX500), Nasdaq (NDX), and Dow Jones (DJI). These are the levels that matter on the technical charts into the weekly open. The assets are chaptered on the recording for your convenience.
US Dollar Index Price Chart – USD 240min (DXY)
Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView
Notes: The U.S. Dollar Index is testing pivotal support around the monthly range low at 99.41/49- a region defined by the 38.2% retracement of the yearly advance and the January swing high. Just below this zone the 200-day and 52-week moving averages converge on the lower parallel near 99.04/18. A break / daily close below this slope would be needed to fuel the next major leg of the decline towards the August high-day close (HDC) / May low at 98.68/69 and the objective yearly open at 98.24.
Monthly open resistance stands at 99.69 and is baked by the 2024 low / low close at 100.16/35. Broader bearish invalidation remains with the March high and the 61.8% extension of the January advance at 100.64/77.
Bottom line: The dollar is testing a major support pivot at the August opening range lows- risk for exhaustion / price inflection into the lower parallel. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies would need to be limited to the median-line IF price is heading lower on this stretch. Review my latest US Dollar Technical Forecast for a closer look at the longer-term USD technical trade levels.
Euro Price Chart – EUR/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Notes: Euro is attempting to mark a fourth consecutive weekly advance, and the rally may be vulnerable into the upper parallel. There are numerous technical hurdles here starting with the 1.618% extension of the June rally at 1.1609, backed closely by the 200-day & 52-week moving averages and the 61.8% retracement of the April decline at 1.1628/33 and 1.1649. A breach / weekly close above this level is ultimately needed to fuel the next major leg of the advance toward the yearly open at 1.1746.
Watch today’s close with respect to the May / January lows at 1.1576/79. Monthly open support converges on the median line early in the week at 1.1535 with near-term bullish invalidation now raised to the 38.2% retracement of the June rally / August range low at 1.1500/04.
Bottom line: The Euro rally has extended into technical resistance at the upper bounds of a multi-week uptrend. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 1.1535 IF EUR/USD is heading higher on this stretch with a close above 1.1649 needed to fuel the next leg of the rally.
Australian Dollar Price Chart – AUD/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView
Notes: AUD/USD has rallied more than 3.8% off the June low with the rally testing resistance early in the week at the 61.% retracement of the May decline at 7120. Daily momentum has reached the highest level since January and the first major test of the July breakout.
Initial support rests at with the weekly open at 7082/83 with near-term bullish invalidation steady at a major Fibonacci cluster around 7003/23. Note that the lower parallel converges on this zone into the close of the week and losses below this slope would suggest a more significant high is in place, and a larger reversal is underway. A topside breach / daily close above 7120 exposes the upper parallel (currently near 7160s) and a longer-term Fibonacci confluence near 7208/14.
Bottom line: Aussie is testing technical resistance here just ahead of the upper parallel. Again, watch the daily close. From a trading standpoint, losses should be limited to 7082 IF price is heading higher on this stretch with a close above 7120 needed to fuel the next leg of the rally.
Economic Calendar – Key Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
--- Written by Michael Boutros, Senior Technical Strategist
TL;DR: AUD/USD has broken out on external tailwinds — a weaker Dollar and rebounding risk appetite — but Thursday’s jobs report lands in the middle of a genuine split between economists who think the RBA is done hiking and an RBA that keeps saying otherwise.
Aussie Has External Momentum — Now Australia Needs to Contribute AUD/USD has already received almost everything it could ask for from outside Australia. The Dollar is weakening as markets scale the Fed path back toward only “one and a bit” additional hikes through mid-2027. Regional risk appetite has rebounded strongly, with the KOSPI more than 30% above its July trough and the Nikkei roughly 14% higher. Against that backdrop, AUD/USD extended its rally from 0.6864 and broke through its near-term channel ceiling, giving the first technical sign that the advance is accelerating.
The question now is whether domestic fundamentals can join the move. Thursday’s July employment report arrives with consensus around just 12k jobs growth, a dramatic slowdown from June’s 76.3k, while the unemployment rate is expected to hold at 4.4%. That would normally look like routine normalization after an outlier. This time, however, the labor data sit directly in the middle of an unresolved disagreement over whether the RBA’s tightening cycle is finished.
Economists Say the RBA Is Done. The RBA Hasn’t Said That. All four major banks now have no further 2026 hike as their base case, with Westpac dropping its August tightening call after softer Q2 inflation data. But the RBA’s own language remains conspicuously hawkish. The August SoMP retained a commitment to increase the cash rate further “if upside risks materialise.” Governor Michele Bullock said at the July 28 Anika Foundation speech that the Board was “prepared to act as required.” After the August hold, Assistant Governor Christopher Kent went further at the Reuters Next event on August 13, saying inflation risks “lean firmly to the upside” and the cash rate “could rise further” if those risks materialise.
That consistency before and after the decision matters. It suggests the hike bias is deliberate rather than a sentence left behind by inertia. At the same time, the rates market hasn’t moved all the way toward bank economists’ conviction: the SoMP cited pricing consistent with roughly a 50% chance of another hike by year-end. ANZ also continues to flag a November hike as a live risk despite its hold base case. In other words, economists are leaning heavily toward “done,” but money markets remain genuinely divided.
One Jobs Report Already Proved It Can Change the Rate Story This year’s employment series has been unusually volatile: -18.6k in April, +43.9k in May, and +76.3k in June. The June surge, almost five times the expected increase, helped send year-end hike odds from around 78% to 97% before the August meeting. The RBA still chose to hold, and the current roughly 50% year-end probability reflects the reset since then. But the precedent is clear: one labor report has already moved RBA pricing materially this cycle.
That gives Thursday a genuine two-sided setup. Another large beat could challenge the hold-through-2026 consensus, revive hike pricing, and potentially add domestic rate support to AUD/USD’s existing Dollar and risk-sentiment tailwinds. A result near or below consensus would instead strengthen the case that June was an outlier and pull market pricing closer to the Big Four view. Neither outcome should be read in isolation, however — jobs this week and CPI next week are better treated as a paired test: only a combination of resilient labor demand and renewed inflation pressure would make the September hike case substantially harder to dismiss.
ActionForex’s Technical View on AUD/USD The chart setup already reflects rising optimism. AUD/USD’s rally from 0.6864 has broken above its near-term channel ceiling, signaling upside acceleration. As long as 0.7042 minor support holds, the next objective sits at the 161.8% projection of 0.6864 to 0.7026 from 0.6921, at 0.7183.
The larger trend remains bullish as well. AUD/USD continues to hold well above the 38.2% retracement of the 0.5913 to 0.7277 rise, at 0.6756, leaving the year-long advance from the 2025 low intact. Price action from 0.7277 is treated as corrective, though it’s too early to rule out another down leg before the larger uptrend resumes.
For now, holding above the 55-day EMA near 0.7023 keeps a retest of 0.7277 favored. The Aussie has already broken higher on external support; Thursday will show whether Australia can supply the next reason to keep buying.
Key Takeaways AUD/USD’s breakout has so far been driven entirely by external factors: fading Fed hike odds and a strong regional risk-appetite rebound. All four major Australian banks expect no further RBA hikes in 2026, but RBA officials, including Bullock and Kent, have kept using hawkish language even after the August hold. Rates markets remain split from bank economists, pricing roughly a 50% chance of another hike by year-end versus the Big Four’s near-unanimous “done” call. June’s 76.3k jobs surge already proved a single report can swing RBA pricing sharply, from 78% to 97% hike odds, showing Thursday’s data carries real two-sided risk. AUD/USD holds above 0.7042 support with 0.7183 as the next objective; the broader uptrend from 2025 stays intact above the 0.6756 retracement level. Related Reading Dollar Index Faces Imminent Breakdown Risk as Fed Hike Path Shrinks. RBA’s Kent Says Tightening Is Working, but Policy Restraint Remains Hard to Gauge RBA Accepts Softer Inflation but Still Leaves Scope for One More Hike
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ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
The Australian Dollar advanced on Friday after US Retail Sales disappointed investors, increasing speculation that the Federal Reserve might not raise rates, as the economy showed tentative signs of weakness. The AUD/USD trades at 0.7083, up 0.34%
The daily chart shows the AUD/USD is bullish, but buyers remain unable to decisively crack the January 29 high of 0.7094, which could open the door for further upside. Momentum shifted bullish since mid-July, as depicted in the Relative Strength Index (RSI).
From a market structure perspective, the pair has not shifted bullish until buyers regain the June 1 peak at 0.7190. Hence, the first AUD/USD resistance is 0.7100, followed by the latter. On further strength, the next stop is 0.7200.
On the downside, the 100-day Simple Moving Average (SMA) at 0.7058 is the first support. Once cleared, the 50-day SMA emerges as the next demand zone at 0.6991, followed by the 200-day SMA at 0.6937.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
The US dollar strengthened against commodity currencies following the release of July US inflation data. The annual Consumer Price Index (CPI) came in at 3.4%, exactly in line with forecasts and down from the previous 3.5%, while prices rose by 0.1% month-on-month. Core inflation also matched expectations, at 0.2% month-on-month and 2.5% year-on-year. Despite the continued easing in price pressures, the report did not deliver any additional disinflationary surprise to the market. Inflation is gradually moving towards the Fed’s target, but the current pace of decline is still insufficient to significantly strengthen expectations of an imminent easing of monetary policy. Against this backdrop, the US dollar managed to recover some of its earlier losses.
USD/CAD In USD/CAD, a bullish engulfing pattern is forming after a test of the key support level around 1.3900. Technical analysis of USD/CAD points to the possibility of a move higher towards 1.3980–1.4000. A break below yesterday’s low could trigger a resumption of the downtrend, with potential targets in the 1.3770–1.3840 area.
Key events for USD/CAD:
today at 15:30 (GMT+3): US Producer Price Index (PPI); today at 15:30 (GMT+3): US initial jobless claims; today at 15:40 (GMT+3): speech by Thomas Barkin, member of the US Federal Open Market Committee (FOMC).
AUD/USD AUD/USD buyers attempted to test the key resistance level around 0.7100 today. The attempt failed, with the price retreating sharply from the level and forming a doji pattern. The appearance of a doji near resistance indicates buyer indecision and increases the likelihood of a corrective decline towards 0.7020–0.7040. The bearish scenario would be invalidated by a firm break and close above 0.7100.
Key events for AUD/USD:
tomorrow at 02:30 (GMT+3): speech by Reserve Bank of Australia Governor Michele Bullock; tomorrow at 04:30 (GMT+3): Australian housing finance data; tomorrow at 15:30 (GMT+3): US core retail sales.
Overall, the inflation data allowed the US dollar to recover some of its earlier losses, but did not provide the market with sufficient grounds for a new sustained move. The further dynamics of AUD/USD and USD/CAD will depend on today’s US producer-price and labour-market data. Stronger-than-expected figures could support the US dollar and increase pressure on commodity currencies, while weaker data could revive expectations of a more dovish Fed policy and limit the dollar’s recovery.
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The Australian Dollar (AUD) trades 0.17% lower at around 0.7050 against the US Dollar (USD) during the early European trading session on Thursday. The Aussie pair extends Wednesday’s correction, which started after revisiting the two-month high near 0.7090, as financial markets remain unconvinced by the Reserve Bank of Australia’s (RBA) hawkish tone.
On Tuesday, the RBA left its Official Cash Rate (OCR) unchanged at 4.35%, as expected, and explicitly said that the central bank won’t hesitate to raise interest rates further, citing upside inflation risks.
Contrary to the RBA’s hawkish remarks, financial markets believe that the RBA’s appetite to tighten monetary conditions appears very weak.
Analysts at Standard Chartered note that, at the press conference, Governor Bullock “talked up the uncertainty around the RBA’s central forecasts and did not rule out the need for more policy tightening in the immediate future if upside inflation risks materialise.”
Despite this hawkish nuance, Standard Chartered emphasises that “our base case remains no more RBA rate hikes in the foreseeable future.” The bank cautions, however, that “the risk to our view is skewed towards a hike in Q4 if demand does not slow sufficiently or if energy prices revisit recent highs, exacerbating both capacity and price pressures.”
Ultimately, “easing labour-market conditions, if sustained, should help contain underlying wage and price pressures in the economy,” supporting their view that further tightening is not the central scenario even as the RBA keeps its options open," Standard Chartered added.
Meanwhile, an upbeat US Dollar, despite traders paring back hawkish Federal Reserve (Fed) bets for the September meeting, is also hurting the Aussie pair.
AUD/USD Technical Analysis
AUD/USD trades lower at around 0.7050, but is holding a constructive bullish bias as it remains within an upward parallel channel. The pair is trading above the 20-day exponential moving average (EMA) at 0.7024, which suggests underlying demand, while the channel top near 0.7077 caps the immediate topside.
The Relative Strength Index (RSI) at 56.69 stays in positive territory, hinting that bullish momentum is intact though not overstretched.
On the downside, initial support is located at the 20-day EMA at 0.7024, ahead of the lower boundary of the rising channel around 0.6951, with a deeper structural floor toward 0.6866. On the topside, a sustained break above the channel resistance at 0.7077 would open the way for further gains within the broader ascending structure. Above 0.7077, major hurdles are the round-level resistance at 0.7100, followed by the June 5 high at 0.7144.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator RBA Interest Rate Decision The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.
AUD/USD started a fresh increase above the 0.7025 resistance. A rising channel is forming with support near 0.7050 on the 4-hour chart. EUR/USD failed near the 1.1580 resistance and dipped. WTI Crude Oil prices could face hurdles near $84.20 and $85.00. AUD/USD Technical Analysis The Aussie Dollar formed a base above 0.6980 against the US Dollar. AUD/USD started a fresh increase above the 0.7000 and 0.7025 resistance levels.
Looking at the 4-hour chart, the pair gained pace for a move toward 0.7100. A high was formed at 0.7091, and the pair is now correcting some gains. There was a move toward the 23.6% Fib retracement level of the upward move from the 0.6922 swing low to the 0.7091 high.
The pair is still well above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). There is also a rising channel forming with support near 0.7050.
On the upside, the pair could face resistance near 0.7080. The next major resistance might be 0.7100. A close above 0.7100 could start another steady increase. In the stated case, the bulls could aim for a move to 0.7145.
Any more gains might open the door for a test of 0.7200. If there is a downside correction, the pair might find bids near 0.7050. The next major support could be near 0.7025 and the 50% Fib retracement level.
The main support might be 0.7000. A downside break and close below 0.7000 might send the pair toward 0.6960. Any more losses could open the doors for a test of 0.6920.
Looking at EUR/USD, the pair failed to continue higher above 1.1580 and started a downside correction.
Upcoming Key Economic Events:
US Initial Jobless Claims – Forecast 202K, versus 199K previous. US Producer Price Index for July 2026 (MoM) – Forecast +0.2%, versus -0.3% previous. US Producer Price Index for July 2026 (YoY) – Forecast +4.9%, versus +5.5% previous.
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The Australian dollar is entering a potentially decisive phase against the US dollar. The Reserve Bank of Australia (RBA) left its cash rate unchanged at 4.35% at its August meeting, as expected, but its message was more hawkish than the decision itself suggested. Governor Michele Bullock warned that another rate increase remains possible if inflation proves persistent, particularly as geopolitical tensions threaten to generate fresh supply shocks.
Daily AUD/USD Chart - Source: ActivTraderFor the AUD/USD, the key question is whether this hawkish stance can support further gains. Australia’s relatively high interest rates could attract demand for the Australian dollar, but the pair’s direction will also depend on the Federal Reserve. With the US July CPI report approaching, the next move could hinge on whether American inflation strengthens expectations for easier Fed policy or instead reinforces a higher-for-longer outlook.
The RBA has paused, but the hiking cycle may not be overThe RBA’s decision to hold rates at 4.35% does not mean the inflation battle is over. The central bank is assessing the impact of three rate increases delivered earlier this year, while tighter financial conditions and a slowing economy gradually weigh on demand.
Inflation, however, remains above the RBA’s 2%-3% target range. The central bank expects headline inflation to ease to 3.6% by the end of 2026 and 2.6% by the end of 2027, while trimmed-mean inflation is projected to fall to 3.3% by year-end.
The trajectory is encouraging, but the RBA sees significant upside risks. The conflict in the Middle East could keep energy and commodity prices elevated, increasing transportation and production costs and encouraging companies to pass higher expenses on to consumers.
That is why Bullock’s comments matter. She challenged expectations that the RBA is finished tightening, saying rates could still need to rise if inflation remains too high. The result is a distinctly hawkish pause: policymakers have stopped raising rates for now but have deliberately kept the door open to further action.
For the AUD/USD, expectations may matter as much as the actual cash rate. If markets believe the RBA could resume tightening while other central banks move toward easing, the expected interest-rate differential can become a source of support for the Australian dollar.
Energy prices complicate the RBA’s outlookThe central bank expects subdued domestic demand and tighter financial conditions to bring inflation gradually back toward target. However, a prolonged Middle East conflict could keep global energy prices elevated and disrupt that process. The RBA has already warned that some businesses are experiencing higher costs and considering price increases.
Higher interest rates can weaken demand, but they cannot directly eliminate an oil supply shock. If energy prices remain elevated for long enough, however, the initial shock could spread through the economy by affecting business costs, consumer prices and inflation expectations.
This makes the RBA’s reaction function more important than the August decision itself. Stronger-than-expected inflation, renewed energy-price pressures or resilient domestic demand could revive expectations of another rate hike. Conversely, faster disinflation and a sharper economic slowdown would give policymakers more room to remain on hold.
The Australian dollar therefore has a potential monetary-policy tailwind, but whether that translates into a sustained AUD/USD rally will depend heavily on developments in the United States.
US CPI is the next major testThe July US Consumer Price Index represents the other half of the AUD/USD monetary-policy equation. Economists expected headline CPI to rise 0.1% month-on-month in July after falling 0.4% in June, with annual inflation easing to 3.4% from 3.5%. Core CPI, excluding food and energy, is expected to increase 0.2% on the month and 2.5% year-on-year.
A softer-than-expected report would strengthen the argument that US inflation is gradually moving lower despite recent supply shocks. That could encourage investors to price a less restrictive Federal Reserve, potentially pushing Treasury yields and the US dollar lower.
Such an outcome would be supportive for the AUD/USD. If Australian inflation remains persistent at the same time, investors could increasingly price a widening interest-rate differential in Australia’s favour.
The opposite scenario would pose a greater challenge to the Australian dollar. A stronger US CPI reading would suggest that inflation remains sticky and could force markets to adopt a more cautious view of Fed policy. Higher Treasury yields would then support the dollar and potentially reverse AUD/USD gains, even if the RBA maintains its hawkish stance.
The core CPI figure could prove particularly important. Energy prices can generate substantial monthly volatility, especially amid geopolitical tensions, but persistent core inflation would provide stronger evidence that underlying price pressures remain entrenched.
Inflation is also a political issue in the USThe importance of US inflation extends beyond the Federal Reserve and financial markets. The cost of living remains politically sensitive ahead of the November 2026 midterm elections, when voters will determine control of Congress.
Inflation is particularly relevant because President Donald Trump won the 2024 presidential election in part on promises to reduce the cost of living. A renewed acceleration in consumer prices could therefore create a difficult political backdrop for the administration, particularly if households continue to feel the cumulative impact of elevated prices.
A disappointing CPI report could reinforce concerns about purchasing power and make economic management an even more prominent issue for voters. Conversely, sustained disinflation could provide some relief for households and improve the administration’s economic narrative.
This does not mean the Fed will adjust monetary policy because of the elections. Its mandate remains focused on price stability and employment. However, the timing creates an additional layer of market sensitivity. The Fed meeting following September takes place only days before the midterms, potentially making the timing of any policy move more politically scrutinized.
For markets, this could make the path toward the end of the year particularly volatile. Stronger US inflation could constrain the Fed’s room to ease, while persistent Australian inflation could simultaneously keep the RBA open to further tightening.
Absolutely. I would merge the two sections into one genuine bottom-line section, rather than repeating the same bullish/bearish logic twice. The conclusion should synthesize the RBA message, the US CPI risk and the rate differential, then leave traders with the key signals to watch.
AUD/USD outlook: RBA-Fed rate differential holds the keyThe outlook for the AUD/USD ultimately comes down to the direction of the monetary-policy gap between the RBA and the Federal Reserve. The RBA’s August decision has kept the door open to further tightening, while the US CPI report could determine whether expectations for Fed policy move in the opposite direction.
The most supportive environment for the Australian dollar would be one in which Australian inflation proves persistent while US price pressures continue to moderate. Such a combination would increase the likelihood that the RBA keeps rates elevated or even raises them again, while giving the Fed greater scope to ease. A widening expected rate differential in Australia’s favour could then provide the AUD/USD with further upside potential.
The risk to this scenario is a renewed acceleration in US inflation. A stronger-than-expected CPI reading, particularly in the core measure, could push Treasury yields and the dollar higher as markets scale back expectations for Fed easing. If Australian inflation were simultaneously cooling, the relative advantage of the RBA’s hawkish stance would diminish, potentially putting renewed pressure on the AUD/USD.
For traders, the key is therefore not simply whether either central bank raises or cuts rates at its next meeting, but how expectations for their respective policy paths evolve. The RBA’s hawkish pause has provided the Australian dollar with a potential monetary-policy tailwind, but the US inflation data will determine whether that advantage widens or narrows.
The next major AUD/USD move could consequently depend on whether markets begin to see Australia and the United States moving into opposite phases of their inflation and interest-rate cycles. Core CPI, Treasury yields and changes in rate expectations will be crucial signals in determining which scenario gains the upper hand.
The AUD/USD pair prolongs its consolidative price move for the third straight day and trades around mid-0.7000s through the early European session on Wednesday. The Reserve Bank of Australia's (RBA) hawkish outlook continues to act as a tailwind for the Aussie, though a modest US Dollar (USD) keeps a lid on the currency pair.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, preserves its weekly gains as inflation risks stemming from volatile oil prices back the case for at least one rate hike by the Federal Reserve (Fed). This, along with persistent geopolitical uncertainties, supports the Greenback's safe-haven status and contributes to capping the upside for the AUD/USD pair.
From a technical perspective, spot prices have been struggling to extend momentum beyond the 100-day Simple Moving Average (SMA) and break out through the 50% Fibonacci retracement level of the May-June decline. This suggests that the topside progress is slowing but not yet reversing as momentum indicators on the daily chart retain a mildly bullish near-term bias.
In fact, a firm Relative Strength Index (RSI) around 58 and a positive, though modest, Moving Average Convergence Divergence (MACD) reading hint that underlying momentum still favors a grind higher rather than a deeper pullback. A sustained move beyond the 50% retracement near 0.7071 will reaffirm the outlook and lift the AUD/USD pair to the 61.8% level at 0.7120.
Should bulls extend the advance, the next relevant barriers align at 0.7189 and 0.7276. On the downside, initial support is seen at the 100-day SMA around 0.7054, ahead of a Fibonacci cluster at 0.7023 and 0.6963. Meanwhile, deeper demand is expected at the 200-day SMA near 0.6931 and the structural low around 0.6867 if corrective pressure around the AUD/USD pair intensifies.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
The Reserve Bank of Australia held the cash rate at 4.35%, with all nine board members voting to leave policy unchanged. The decision itself was expected. The more useful signal came from why the Bank chose to pause.
Inflation is still too high, but consumer spending, housing and the labour market are beginning to cool. After three rate hikes this year, the RBA now wants to see how much of that tightening is still working through the economy before deciding whether another increase is needed.
That leaves the RBA in an awkward middle ground: not enough evidence to hike again immediately, but not enough disinflation to declare the tightening cycle finished. For AUD, the next move is therefore a confirmation story rather than a simple hawkish-rate story.
The RBA is pausing to assess, not declaring victoryThe latest statement suggests the RBA believes tighter policy is starting to have a real effect. Trimmed mean inflation remains elevated, but softer consumer spending, cooler housing conditions in some capital cities and a softer labour market all point to demand losing some momentum.
That is why the hold should not be read as a dovish pivot. The Bank can keep policy restrictive while waiting for the lagged effect of earlier hikes. If inflation remains sticky, or global energy risks keep price pressures elevated, the option of another hike remains open.
For AUD, this is supportive at the margin, but it is not a one-way bullish signal. The currency still has to prove that the RBA backdrop is strong enough to overcome resistance and whatever the US dollar does next.
AUD/USD now has to clear 0.704-0.708AUDUSD is now testing the 0.704-0.708 resistance area on the daily chart. Price has pushed into a previous high range, but the latest candles are beginning to stall and momentum has failed to confirm the higher high.
From here, the US side of AUDUSD becomes the next immediate driver, with US CPI due tomorrow on 12 August.
A hotter US inflation print would make it harder for AUDUSD to break higher. The first pullback references sit near the channel midline around 0.700 and the lower channel area near 0.695. A clean channel failure would expose the larger 0.683-0.687 support zone.
A cooler US CPI print would give the pair more room to break above 0.708. If price can close above that area and hold it on a retest, the next references are around 0.718 and then 0.723-0.727.
Fundamentally, the RBA is in a much more comfortable position than earlier in the year.
Softer housing activity, lending, consumer spending and labour conditions suggest its previous hikes are beginning to cool demand, which should gradually ease inflation pressure. Technically, AUDUSD may also be forming bearish divergence at resistance.
RBNZ shows a hawkish policy is not enoughThe RBNZ offers a useful warning against treating a hawkish central bank as an automatic bullish currency signal. It raised the Official Cash Rate to 2.50% on 8 July and said further increases are likely, although the timing remains uncertain.
Even so, NZD/USD remains below its long-running weekly downtrend and beneath the 0.603-0.612 resistance area. The pair has not converted renewed RBNZ tightening into a structural breakout of its trendline resistance.
That makes NZD/USD a control case for the RBA story. Domestic policy can support a currency, but relative growth, commodity exposure, the US dollar and existing price structure still decide how much of that support reaches the exchange rate.
AUD/NZD may be reaching a turning pointRemoving the US dollar from the equation, the RBA may finally be starting to see its aggressive tightening cycle pay off.
Housing activity and new lending have cooled, consumer spending has slowed, and labour conditions have softened, giving the Bank more reason to pause and assess the impact of the three hikes delivered between February and May.
The RBNZ, on the other hand, is at a much earlier stage. It only restarted tightening in July, raising the OCR to 2.50%, with further hikes still likely. That timing gap matters because Australia may now be moving into the later stages of its tightening cycle just as New Zealand begins applying more pressure.
If that gap starts to narrow, so could Australia’s relative rate advantage. That raises the risk that AUDNZD is approaching a turning point rather than simply extending higher.
The idea that AUD may weaken against the NZD is supported technically as well.
The pair has tapped a major trendline resistance extending from 2019 with almost perfect precision. The current pullback could still form a bull-flag consolidation, but failure to recover would leave room for a deeper retracement towards roughly 1.162-1.169, where the trading volume weighted average price anchored from the start of the rally sits.
Both WTI and Brent have returned to inflated levels again as traffic in the Strait of Hormuz grinds to a halt.
There seems to be no end in sight to the war, and many economies are reporting diminishing reserves of crude.
In today’s Market Outlook, let’s take a look at Forex trading on GBPUSD, Gold, XAUUSD, Silver, XAGUSD, AUDUSD, USDCAD, USDJPY, WTI and Brent Crude Oil.
We see some technical signs on WTI with price at the upper trend line in this bearish channel and the stochastic oscillator overbought.
But this is by no means a technical trade, as only peace talks and negotiations about the passage of tankers will affect the price of crude oil.
All JPY pairs are turning bullish as the intervention by the US Treasury only seems to have had a short-term effect, as we discussed in an earlier video:
Why USDJPY Suddenly Fell | US Intervention Explained | Will the NASDAQ Catch Up? #marketoutlook.
But, as we pointed out, Scott Bessent said he might buy a few more billion dollars worth of yen, if necessary, so we may get to witness temporary JPY strength and bearish price action on pairs like USDJPY.
Check all your favourite JPY pairs as they all look roughly the same.
Last week the US saw a dreadful Non-Farm Payrolls report, meaning that the US Federal Reserve will likely not raise interest rates next month, driving USD weaker.
The Canadian figures, on the other hand, were much better than analysts’ expectations, driving CAD stronger.
These factors, with the rising price of crude, saw price action on USDCAD falling to a key level with bearish technicals.
We will now watch for a break below support and a long way to fall before the next key levels.
Be aware that tomorrow we have US CPI, which is the key measure of inflation for the Fed, so anything can happen.
Another USD pair we will be watching is AUDUSD, which has retraced from the news and has fallen to this lower trend line on the 4-hour.
The weaker USD has gold and silver climbing again, but our stochastic oscillator looks like it might turn down; keep an eye on the economic and geopolitical news.
We are seeing a descending triangle in the UK’s FTSE100 index, and price is stalled at support.
A fall in crude oil prices may also have a negative effect on the FTSE, and GBP will usually influence it.
We can see on the GBP charts that the Pound has short-term strength against all others except CAD and NZD.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.
The Australian Dollar (AUD) has reacted with moderate declines against the US Dollar (USD) following Reserve Bank of Australia Governor Michelle Bullock's speech on Tuesday. The AUD/USD spiked down below 0.7050, from Monday’s highs near 0.7075, as Bullock addressed the press, following the bank's monetary policy decision, to regain lost ground shortly afterwards.
The RBA left its benchmark interest rate unchanged at 4.35%, as expected, and Bullock struck a hawkish note, hinting at a likely interest rate hike in the coming months. The RBA Governor also affirmed that the domestic economy is operating “above capacity” and that it will be needed to slow down economic growth to tame inflationary pressures.
Technical Analysis: The near-term bias remains positive
AUD/USD hovers around 0.7050, holding within an upward-sloping parallel channel and retaining a mildly bullish near-term bias. Momentum indicators, however, have retreated into neutral territory with the 4-hour Relative Strength Index (14) nearing the 50 midline and the Moving Average Convergence Divergence (MACD) indicator slipping marginally into negative territory, hinting at waning upside pressure rather than a decisive reversal.
Bears would need to break the channel floor, around 0.7030 and the August 6 and 7 lows, at 0,7022 to confirm a trend shift and aim for last week's low, at the 0.6985 area. On the topside, initial resistance emerges at the horizontal barrier near 0.7085 (June 15 high), ahead of the channel top, now around 0.7120.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%-0.05%-0.08%-0.07%-0.06%-0.10%-0.00%EUR-0.03%-0.07%-0.06%-0.08%-0.04%-0.12%-0.01%GBP0.05%0.07%0.00%-0.03%0.01%-0.05%0.05%JPY0.08%0.06%0.00%-0.01%0.02%-0.04%0.07%CAD0.07%0.08%0.03%0.00%0.04%-0.03%0.07%AUD0.06%0.04%-0.01%-0.02%-0.04%-0.07%0.04%NZD0.10%0.12%0.05%0.04%0.03%0.07%0.11%CHF0.00%0.01%-0.05%-0.07%-0.07%-0.04%-0.11% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
The RBA held its cash rate at 4.35% as widely expected and maintained its hawkish bias in the statement. It arguably had to do so to help manage inflation expectations. While it closed with a warning of further hikes, it was conditional on “if upside risks materialise”. And with the decision to hold being unanimous, there appears to be no urgency to tighten.
View related analysis:
Japanese Yen Outlook: US CPI, Intervention Risks Put USD/JPY Bulls on Notice Australian Dollar Outlook: AUD/USD in the Hands of the RBA and US CPI FX Futures Positioning: US Dollar Longs Plunged, Yen Shorts Slashed Gold Price Outlook: Can Quiet Accumulation Trigger a Breakout? While the impact of the Middle East conflict has not resulted in the higher inflation feared, the RBA acknowledged that elevated commodity prices continue to pose an inflation risk. Ultimately, inflation remains too high and is unlikely to fall quickly – and that should be enough to expect hawkish holds from the RBA going forward, even if the hawkish bias is viewed as an insurance policy against upside inflation risks rather than signalling an assured move to raise rates.
This provides a mildly bullish case for the Australian dollar, thanks to its higher yield and traders scaling back expectations for Fed rate hikes. But those seeking a more meaningful policy divergence between the RBA and Fed are likely to be disappointed.
Source: RBA, LSEG
AUD/USD Wobbles as Hawkish RBA Hold Meets US CPI Money Markets Price Out Further RBA Rate Hikes The OIS curve is broadly lower as money markets continue to price out even a single hike a year from now. ASX 200 rose 0.4% and trades just beneath its record high, with the prospects of no further hikes deemed as a good sign from local equity traders The Australian dollar was a touch lower against all FX majors, aside from thew Swiss franc AUD/NZD is leading the way lower among Aussie pairs, down for a second day and 0.2% lower on the day AUD/USD is down less than 0.1% from yesterday’s close, making it a low volatility even for the Australian dollar with no policy divergence to lean into
AUD/USD Technical Analysis: Australian Dollar vs US Dollar The Australian dollar continues to grind higher in a somewhat predictable yet messy way. Notice that AUD/USD seems to print a solid bullish candle every few days, but each time its range loses momentum as it tries to make its way to 71c. The Aussie is currently lower for a second day, though it is hardly showing any signs of strength from the bear camp.
With a mildly bullish fundamental backdrop, Australian dollar bulls may be seeking dips with the 71c handle in sight. But given the hard work it is making of any gains, I am also on guard for a pullback. Perhaps just to its 10-day EMA (0.7032), or the potential support zone between 0.70–0.7128, comprising the 20- and 50-day EMAs and the 70c handle.
Focus now shifts to US CPI data tomorrow, which is likely to have a bigger sway over whether AUD/USD finishes the week above or below 71c.
Source: ICE, TradingView
Highlights of the RBA Statement RBA held the cash rate at 4.35%, with the decision unanimous. Inflation remains too high, with trimmed mean inflation still elevated and little changed from the March quarter. The impact of the Middle East conflict on inflation has been less severe than expected, although oil and related commodity prices remain elevated. Inflation expectations have eased, but remain higher than earlier in the year. The RBA expects inflation to remain high for some time, with inflation not expected to return to around the midpoint of the target range until late 2027. Financial conditions have tightened following three rate hikes this year, while consumer spending is slowing as expected. The labour market has eased slightly more than expected, although only limited further easing is anticipated in the near term. The RBA remains concerned about upside risks to inflation and will raise rates further if those risks materialise. With monetary policy judged to be “somewhat restrictive”, the Board opted to hold rates while assessing how the economy evolves. View the full economic calendar
The Australian dollar enters the week on a six-week winning streak, but the rally could face an important test from the RBA and US CPI. Markets have priced out a near-term RBA hike following softer Q2 inflation, leaving the US dollar and incoming US data increasingly important for AUD/USD. A weak CPI print could undermine Fed hike expectations and give the Aussie room to push higher, while a hotter result could support the US dollar and limit gains around 71c.
View related analysis:
Australian Dollar Outlook: AUD/USD, AUD/JPY and AUD/NZD Setups Australian Dollar Broadly Lower as Soft CPI Reverses RBA Hike Bets Gold Price Outlook: Can Quiet Accumulation Trigger a Breakout? US Dollar Awaits NFP as September Fed Hike Odds Hang in the Balance Australian Dollar Outlook: RBA and US CPI Set the Tone US Jobs Growth Contracts as Hiring Weakens Expectations for a September Fed rate cut were lowered once again following a weak nonfarm payrolls report. NFP job growth fell 23k – its first contraction in six months – missing the 85k estimate. June’s NFP was downgraded to 20k from 57k, while private payrolls slowed to 30k, missing the 78k expected, with June’s figure slashed to 330k from 48k. Healthcare and social assistance – which has accounted for around 80% of total job growth over the past 18 months – rose by a mere 22k, government jobs fell 53k and retail trade was down 19.4k. While unemployment fell to 4.1%, the focus was on growth – or lack thereof.
Fed fun futures now imply a 57% of no rate change in September, from a 54% chance of a hike before NFP. October hike odds are now 47%.
The US dollar was broadly lower on Friday and the weakest FX major, seeing the USD index form a bearish engulfing candle and weakest close in two months. Gold surged to a 7-week high during its best week 9 in 28.
Australia This Week: Economic Data and Events for AUD/USD Traders RBA To Deliver a Hawkish Hold? Markets have effectively priced out a hike from the RBA this week following weaker-than-expected Q2 CPI figures two weeks ago. The OIS curve still suggests an 89% chance of a single 25bp hike within one year, however. The RBA’s tone could therefore shape expectations for that hike, but few are expecting one anytime soon.
Inflation remains firmer than the RBA would like and above its target band, which should force it to retain a hawkish bias tomorrow. But unless crude oil prices rip higher again due to another flare-up in the Middle East peace process, it seems likely that the RBA’s cash rate may have peaked at 4.35% for now. That said, it seems unlikely the RBA will tank the Australian dollar with a dovish tone.
The Australian dollar may therefore take its directional cue from a weaker US dollar rather than hawkish RBA expectations. This could see the Aussie grind higher without going on a tear, although resistance looms for AUD/USD and support is nearby for the US dollar index.
Source: LSEG
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Traders will be on high alert for any pockets of weakness in incoming US data following the latest NFP miss. Core CPI will be top of the list, especially as ISM services prices paid have fallen from elevated levels and crude oil prices are lower than they could have been. Even a vaguely weak inflation print could crush hopes of another Fed hike, send the US dollar lower and lift risk appetite, allowing AUD/USD to rally along for the ride.
Traders will then shift their focus to producer prices and retail sales, with any signs of weakness potentially backing bets to short the US dollar. So, US inflation data could hold the key to the Australian dollar’s direction this week. An upside CPI surprise could muddy the waters, help the US dollar recover and stifle the AUD/USD rally around 71c.
Source: BLS, ISM, LSEG
Australian Dollar Performance It has been a bullish month for the Aussie overall, although its performance has been uneven – and that could point towards a mixed performance ahead. Cleaner, more explosive moves tend to occur during periods of risk aversion, risk rebounds or central bank policy divergence. None of those are apparent at the moment. SO unless a fresh catalyst arrives, moves could be on the smaller side. Though the best chance of a rally from AUD/USD could be if we see US data continue to undershoot expectations.
Chart prepared by Matt Simpson - Source: LSEG
AUD/USD rose for a sixth consecutive week and closed firmly above 70c. Whether it rises for a seventh week could come down to US data. AUD/CAD remains confined to its established range, which has favoured bearish setups near the highs and bullish setups near the lows. AUD/CHF appears to be forming a bullish flag around its cycle highs. AUD/EUR is becoming difficult to decipher directionally, given its series of higher lows and higher highs, which also lacks the structure of a continuation triangle. AUD/GBP is trying to gain further ground after bulls defended the March low, but this could also form the ‘right shoulder’ of a classic H&S bearish reversal. AUD/JPY found support at the 2024 high and shows potential to recoup more of its post-intervention losses. AUD/NZD formed a bearish engulfing week and closed below 1.20, although the sell-off from the highs is losing momentum overall. I am therefore not convinced it is ready to roll over without a fresh catalyst.
AUD/USD Technical Analysis: Australian Dollar vs US Dollar AUD/USD Correlations Strengthen Against the US Dollar The Aussie’s strongest relationship remains with the US dollar, with the inverse correlation between AUD/USD and the US dollar index (DXY) rising to -0.90 over 10 days, from -0.87 over 20 days and -0.82 over 60 days. China and risk sentiment remain supportive: AUD/USD has a 0.97 correlation with the Chinese yuan and 0.78 with the S&P 500 over 10 days. Gold has also become more closely aligned, with the correlation rising to 0.89 over 10 days. Commodity links are more mixed: copper's correlation has fallen to 0.51, while WTI crude oil has shifted to a -0.61 inverse correlation.
Source: LSEG
For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.
AUD/USD Positioning Shifts as Longs Increase Large speculators increased gross longs by 6.6k contracts last week, their fastest weekly increase in three months. Gross shorts were a touch lower, suggesting the dynamics behind the Aussie’s rally are slowly changing. Total open interest is also rising alongside prices, pointing to broader demand for the Australian dollar from futures traders.
So, despite AUD/USD rising for six consecutive weeks, it still has potential to move higher if the US dollar remains under pressure. Six consecutive weekly gains is certainly on the extreme side, but the rally over this period has not been excessive. Taking the strong inverse correlation with the US dollar into consideration, the dollar remains in the driving seat.
Source: CFTC (COT) CME, LSEG
AUD/USD Options Signal Further Upside The US dollar index is clinging to support around the 99.384 swing low after breaking below its bullish trendline and 200-day MA last week. Incoming US data could decide which side of support it lands on by Friday’s close, and therefore whether AUD/USD can extend its trend or retrace lower.
Risk reversals remain supportive of the AUD/USD rally for now, with the rising lines showing that call demand is increasing relative to puts, even though puts remain dominant on an absolute basis. The one-week implied volatility band sits at 0.6996–0.7136, while the 71c handle also looks like a likely resistance level unless the US dollar index simply rolls over.
I have a hunch that inflation may not surprise much in either direction, which leaves the option, but not the obligation, of another Fed hike. That could allow AUD/USD to grind higher towards 0.7100–0.7136.
The AUD/USD pair finds some support near the 38.2% Fibonacci retracement level of the May-June corrective slide and, for now, seems to have stalled its pullback from the highest level since June 17, around 0.7065, touched earlier this week. Spot prices, however, struggle to attract meaningful buyers as geopolitical uncertainties continue to support the safe-haven US Dollar (USD) ahead of the crucial US monthly employment details.
The closely watched US Nonfarm Payrolls (NFP) report will be looked for fresh cues about the US Federal Reserve's (Fed) policy path. The outlook, in turn, would drive the US Dollar (USD) and provide a fresh impetus to the AUD/USD pair. In the meantime, the US-Iran standoff acts as a tailwind for crude oil prices, reviving inflation fears and bolstering bets for at least one Fed rate hike in 2026. This is seen acting as a tailwind for the USD and capping the upside for the currency pair.
From a technical perspective, the AUD/USD pair's inability to build on this week's strength above the 100-day Simple Moving Average (SMA) and the subsequent failure near the 50% Fibo. level warrants some caution for bulls. Meanwhile, the Relative Strength Index (RSI) near 56 suggests moderately constructive momentum, and the Moving Average Convergence Divergence (MACD) indicator holds slightly positive. Moreover, spot prices hold comfortably above the 200-day SMA at 0.6923.
The long-term moving average remains well below the current price, hinting at broader downside protection. Hence, any further weakness below the 38.2% Fibo. level and the 0.7000 psychological mark could find decent support near the 23.6% level at 0.6966 and the 200-day SMA at 0.6923. Further down, the structural floor near 0.6870 is expected to act as a more significant medium-term base for the AUD/USD pair if short-term bearish pressure resumes.
On the topside, initial resistance is seen at the 100-day SMA at 0.7052, followed by the 50.0% Fibonacci retracement at 0.7074 and the 61.8% level at 0.7122, with higher barriers emerging at 0.7190 and 0.7277.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Economic Indicator Nonfarm Payrolls The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
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The AUD/USD pair edges lower during the Asian session on Thursday and moves away from the highest level since June 17, touched the previous day. Spot prices currently trade just below 0.7050, though the downside potential seems limited.
Despite optimism over a potential US-Iran deal and the reopening of the Strait of Hormuz, the US Dollar (USD) gains some positive traction and snaps a two-day losing streak as bears await further developments surrounding the Middle East crisis. This, in turn, is seen as a key factor exerting some pressure on the AUD/USD pair. Any meaningful decline, however, seems elusive ahead of China's Trade Balance data and the crucial US Nonfarm Payrolls (NFP) report on Friday.
From a technical perspective, spot prices struggle to capitalize on the previous day's move beyond the 100-day Simple Moving Average (SMA) and fail ahead of the 50% Fibonacci retracement level of the May-June decline. However, the Moving Average Convergence Divergence (MACD) indicator stays modestly positive. Moreover, the Relative Strength Index near 58 suggests constructive momentum without entering overbought conditions, hinting that dips could still attract buyers.
That said, traders might wait for some follow-through buying beyond the 50% level at 0.7070 before positioning for further gains. Against the backdrop of the recent bounce from the very important 200-day SMA, the breakout would expose the 61.8% level at 0.7120 and then the 78.6% retracement at 0.7191, ahead of the cycle high region near 0.7281.
On the downside, initial support is seen at the 38.2% retracement at 0.7020, with further demand emerging at the 23.6% level at 0.6958 and the 200-day SMA around 0.6920. A deeper slide toward the 0.6859 anchor would significantly weaken the current constructive tone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
TL;DR: AUD/USD is rallying on improving risk sentiment and a softer Dollar, but the same falling oil prices driving that optimism are also weakening two of Australia’s own fundamental supports — explaining why the pair has lagged the broader market risk momentum.
A Rally That Looks Surprisingly Restrained AUD/USD has staged a rally over the past two days, benefiting from a broad improvement in global risk sentiment, a softer US Dollar, and surging industrial commodity prices. Yet the Aussie’s momentum has looked surprisingly restrained. Wall Street has pushed to fresh record highs, Asian equities have rebounded, and copper has climbed to another record — but AUD/USD has merely edged toward resistance rather than breaking decisively higher.
The contrast suggests the market is weighing two very different implications of the same geopolitical story. Optimism that the Strait of Hormuz could reopen is undoubtedly supporting risk assets globally, but it’s also lowering oil prices in a way that weakens some of Australia’s own fundamental supports. The result is a currency pair caught between powerful global tailwinds and equally meaningful domestic headwinds.
Risk Appetite Is Providing Plenty of Support There’s little doubt the global backdrop has become more supportive for growth-sensitive currencies. The Dow Jones Industrial Average climbed to another record high overnight, while both Japan’s Nikkei and South Korea’s KOSPI surged more than 3.5%, reflecting a broad-based improvement in investor confidence rather than isolated strength in individual markets. Such an environment has traditionally favored the Australian Dollar, often treated as a high-beta proxy for global growth expectations.
Commodity markets have reinforced that narrative. Copper has climbed to fresh record highs this week, supported by structural demand from AI-related infrastructure investment and ongoing supply constraints in China. For Australia, this is particularly significant — copper isn’t merely another commodity but an important contributor to the country’s terms of trade, meaning sustained gains normally translate into stronger support for the Australian Dollar.
At the same time, the US Dollar has weakened as markets rapidly scaled back expectations for further Federal Reserve tightening. The probability of the Fed leaving rates unchanged in September has risen sharply over the past two days, as hopes of a Strait of Hormuz reopening reduced fears of another energy-driven inflation shock. Lower Treasury yields have weighed broadly on the Dollar, providing AUD/USD with an additional lift even without any improvement in Australia’s own economic outlook.
The Same Oil Story Is Working Against Australia The complication is that the very catalyst supporting global markets is simultaneously creating domestic headwinds for the Australian Dollar.
Lower oil prices reduce imported inflation pressures, reinforcing recent market repricing that the Reserve Bank of Australia can comfortably remain on hold after softer inflation and cooling labor market data. Markets had already moved toward expecting a prolonged pause in the RBA’s tightening cycle; falling energy prices only strengthen that conviction by reducing one of the principal upside risks to inflation.
Oil also matters to Australia through a less obvious but equally important channel. A large share of Australia’s LNG exports is priced against Japanese Customs-Cleared Crude benchmarks. As Brent declines, Australia’s export revenues from LNG become less supportive for the country’s terms of trade. In other words, the same fall in oil prices that boosts global equities also removes one of the Australian Dollar’s traditional sources of fundamental support.
This explains why AUD/USD has lagged behind the broader improvement in market sentiment. The global risk environment argues for a stronger Australian Dollar, but Australia’s own interest rate outlook and export dynamics are pulling in the opposite direction.
ActionForex’s Technical View on AUD/USD Technically, AUD/USD’s rebound from 0.6864 resumed by breaking through temporary top today. For now, further rally is expected as long as 0.6983 minor support holds. The next target is the 100% projection of 0.6864 to 0.7026 from 0.6921, at 0.7021. A decisive break there would argue the rebound is an impulsive move — and, more importantly, add to the case that it’s reversing the whole fall from 0.7277. In that scenario, further rally should be seen to the 161.8% projection at 0.7183 next.
However, rejection at or below 0.7021, followed by a break of 0.6983, will turn focus back to 0.6921. A firm break there would argue the rebound has completed as a corrective move, in turn suggesting the fall from 0.7277 is ready to resume through the 0.6864 low.
Key Takeaways AUD/USD has lagged Wall Street’s record highs, a 3.5%+ Asian equity surge, and record copper prices despite the same optimism driving all three. Falling oil prices, tied to Strait of Hormuz reopening hopes, are cutting two ways: supporting global risk assets while reducing Australia’s imported inflation and LNG export revenue. Markets are increasingly confident the RBA can stay on hold, and falling energy prices reinforce that view by removing a key upside inflation risk. A softer US Dollar, driven by fading Fed tightening expectations, is providing AUD/USD support independent of any change in Australia’s own outlook. 0.7021 is the key resistance for confirming an impulsive rebound toward 0.7183; a break of 0.6921 would instead point to a resumed fall toward 0.6864.
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AUD/USD moves little after registering over 0.5% gains in the previous day, trading around 0.7050 during the Asian hours on Wednesday. The technical analysis of the daily chart shows that the pair is remaining within the ascending channel pattern, suggesting a prevailing bullish bias.
The AUD/USD pair holds a constructive near-term bullish bias as spot remains above both the nine-period Exponential Moving Average (EMA) and the 50-period EMA, keeping the recent recovery underpinned.
The 14-day Relative Strength Index (RSI) hovers around 59, pointing to firm but not extreme bullish momentum, while the elevated FXS Fed Sentiment Index at 145.80 suggests policy-related headlines could continue to inject volatility into the trend.
The AUD/USD pair may rise toward the upper boundary of the ascending channel around 0.7120. A sustained break above the channel would strengthen the bullish bias and lead the pair to explore the region around 0.7277, the highest since June 2022, recorded on May 6.
On the downside, the initial support rests at the nine-day EMA of 0.7013, closely backed by the 50-day EMA at 0.7007 and the lower boundary of the ascending channel near 0.7000. A breach below this channel could trigger a bearish turn, driving the AUD/USD pair toward its March 30 six-month low of 0.6833.
AUD/USD: Daily ChartAussie extends rebound but UOB flags stiff resistance near 0.7075Strategists at UOB Group note that the Aussie has staged a stronger-than-expected comeback after its recent slide. They recall that after AUD “retreated sharply to a low of 0.6984 two days ago,” they had expected that “the sharp retreat appears to be overdone, and instead of continuing to decline today, AUD is more likely to trade in a range between 0.6980 and 0.7030.” Instead, the currency “rose to a high of 0.7049 before closing on a firm note at 0.7047 (+0.67%),” with UOB highlighting that “upward momentum is building, and AUD could continue to rise today.”
However, they caution that, based on the prevailing momentum, “any advance is unlikely to break above the major resistance at 0.7075 (there is another resistance level at 0.7060).” On the downside, UOB stresses that “to sustain the build-up in momentum, AUD must not break below 0.7020, with minor support at 0.7030.”
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.05%-0.04%-0.05%0.09%-0.05%0.36%-0.12%EUR0.05%0.00%-0.02%0.13%-0.01%0.40%-0.08%GBP0.04%-0.00%-0.02%0.12%-0.02%0.41%-0.08%JPY0.05%0.02%0.02%0.14%0.00%0.41%-0.07%CAD-0.09%-0.13%-0.12%-0.14%-0.14%0.30%-0.20%AUD0.05%0.01%0.02%-0.00%0.14%0.41%-0.06%NZD-0.36%-0.40%-0.41%-0.41%-0.30%-0.41%-0.47%CHF0.12%0.08%0.08%0.07%0.20%0.06%0.47% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Improving risk sentiment helped lift the Australian dollar after easing Middle East tensions and stronger US economic data. While AUD/USD, AUD/JPY and AUD/NZD all advanced, each cross is approaching important technical levels that could determine whether the rally extends or fades.
View related analysis:
Gold Price Outlook: Can Quiet Accumulation Trigger a Breakout? Japanese Yen Outlook: USD/JPY Plunge Loses Steam, but Risks Remain USD at a Crossroads: Can EUR/USD and AUD/USD Extend Their Gains? FX Futures Positioning: Yen, Euro Bears Caught Short | COT report Risk Sentiment Drives the Australian Dollar Higher Middle East Optimism Lifts Global Risk Sentiment Prospects that the Strait of Hormuz could reopen boosted risk appetite on Tuesday, lifting Wall Street sentiment. ISM manufacturing PMI also edged higher to 55.6 from 53.3. Employment expanded, new orders ticked higher and prices paid ticked lower, albeit from elevated levels. The S&P 500 and Dow Jones reached record highs, while the Nasdaq closed in on 30,000. The SPI 200 rose 0.4% overnight, which should see the ASX 200 gap higher and place its all-time high within a day's typical trading range.
Antipodeans Lead as Yen Lags AUD/USD and NZD/USD were the strongest FX majors as the antipodeans embraced the positive lead from the Middle East headlines. Whether that proves to be another false start, however, risks reversing that sentiment. The Japanese yen was the weakest FX major, although its losses were marginal as traders likely remained wary of betting against the combined might of the MOF and the Fed. USD/JPY edged higher in line with yesterday's bias, although resistance emerged around the first zone, which includes the 200-day moving averages near 157.80. I suspect bears are seeking evidence of swing highs around resistance levels, with 158.00, 159.00 and 159.40 the main contenders.
Source: LSEG
Australian Dollar Technical Setups AUD/USD Presses Against Key Resistance The Aussie has so far held up well against the US dollar's mild bullish retracement. Given the AU-US two-year yield spread has risen so far this week, perhaps a breakout is on the cards in the near term. For now, AUD/USD continues to respect the June VPOC as resistance, and even if bulls break above it, they still have the monthly R1 pivot point and the June 15 high to contend with. A break above 0.7100 could provide the first real test of this risk-on rally.
For now, however, my bias remains for a swing high to form and for AUD/USD to snap its four-week winning streak. The RBA seems unlikely to hike again this cycle, while futures traders continue to increase their bearish bets against the Australian dollar, according to recent Commitment of Traders (COT) data.
Source: ICE, TradingView
AUD/JPY Bounce Faces Heavy Resistance After its worst five-day run in 15 months, AUD/JPY found support at its 200-day moving averages and formed a bullish engulfing day. Under normal circumstances, this could provide the foundation for a decent rebound, but traders are right to remain wary of betting against the Japanese yen too aggressively given the scale of currency intervention over the past week. I therefore suspect that, as with USD/JPY, bears may be looking to fade rallies around resistance levels.
Tuesday's high stalled around the July low, the 111.00 handle and the prior intervention level. The monthly pivot point also sits just beneath the 112.00 handle, while the July VPOC is near 112.50. Ultimately, bears have several notable resistance levels to monitor for evidence of a potential swing high.
Source: ICE, TradingView
AUD/NZD Bears Defend the 1.20 Handle The Aussie is in a clear downtrend against the Kiwi dollar on the daily chart, although it is trying to form a swing low. Monday's bearish outside candle met resistance at the 1.20 handle before closing beneath the March low, although Tuesday's bullish inside day suggests a tentative attempt to form a trough.
Today's New Zealand employment figures could determine whether hawkish RBNZ bets help push AUD/NZD towards the 200-day moving averages at 1.1556, or whether bulls have another crack at 1.20. But until we see a break or daily close above 1.20, risks remain skewed to the downside, with a break beneath the 200-day moving averages bringing 1.18 into focus.
AUD/USD waits for a clearer signalDirectional bias: Neutral to bullish above 0.6900, although repeated difficulty clearing 0.7000 leaves the pair exposed to another rejection.
Preferred approach: Patience may offer a better risk-reward profile than chasing the pair immediately below resistance. A confirmed break above the 0.7000 threshold or a pullback that holds around the 200-day SMA would provide a cleaner setup.
Bullish trigger: A sustained move above 0.7000, ideally supported by firm Australian labour data, stronger expectations of another RBA rate increase, lower US yields or an improvement in risk appetite.
Bearish trigger: Another failure at 0.7000, accompanied by renewed US Dollar strength or a generalised deterioration in market sentiment.
Key invalidation level: A daily close below the 200-day SMA around 0.6900 would undermine the broader constructive structure and increase the risk of a deeper retracement in the short-term horizon.
Three paths from the 0.7000 crossroadsBase case: The range holds
AUD/USD could remain trapped between the 0.7000 psychological barrier and the 200-day SMA just above 0.6900 while traders wait for a sufficiently strong catalyst.
Australia’s relatively solid domestic fundamentals and the Reserve Bank of Australia’s (RBA) cautious stance should discourage aggressive selling. At the same time, persistent demand for the Greenback and geopolitical uncertainty could prevent an immediate breakout.
Until either boundary gives way, spot may be better treated as a side-lined trade than a convincing directional move.
Bull case: Buyers establish a foothold above 0.7000
A convincing break above 0.7000 would suggest that buyers have absorbed the selling pressure surrounding this closely watched threshold.
The breakout would carry greater conviction if supported by:
Firmer-than-expected Australian data releases.A stable or lower Unemployment Rate.Increased expectations of another RBA rate hike.Lower US yields and a softer US Dollar.An improvement in risk-linked sentiment.Under this scenario, the next important medium-term target would emerge around 0.7200, followed by the 2026 ceiling near 0.7280.
The sizeable build-up of speculative AUD shorts could add fuel to the move if a confirmed breakout forces bearish traders to unwind their positions.
Bear case: Another rejection opens the door to 0.6900
A fresh failure around 0.7000 could bring sellers back into the market, particularly if the Greenback regains momentum or global risk appetite deteriorates.
The next major test would then be the 200-day SMA around 0.6900. A daily close below this area would damage the wider bullish structure and increase the probability of a deeper correction.
Once that support gives way, previous resistance and consolidation zones below 0.6900 could return to focus.
Australia’s economy continues to hold its groundAustralia’s domestic backdrop remains relatively healthy, supported by firm demand, positive growth and a resilient labour market.
July business surveys reinforced that picture. The Manufacturing PMI improved to 52.0 from 51.5, while the Services PMI rose to 53.0 from 50.5, leaving both sectors comfortably in expansionary territory.
The June labour-market report was also encouraging. The Unemployment Rate held steady at 4.4%, while Employment Change jumped by 76.3K following a revised 44K increase in May.
Still, the picture is not uniformly positive. Australia recorded an A$3.018 billion trade deficit in May, reversing April’s A$1.383 billion surplus. Economic growth also slowed to 0.3% quarter-on-quarter in the first three months of 2026, down from 0.9%, while annual growth held at 2.5%.
Overall the figures suggest a resilient economy but perhaps not strong enough on its own to trigger a sustained breakout in AUD/USD.
Inflation leaves the RBA with unfinished businessAustralian headline inflation eased to 3.9% in the second quarter from 4.1%. Underlying price pressures, however, remained uncomfortable. Both the Trimmed Mean and Weighted Median measures rose to 3.6% from 3.5% in the previous quarter.
Consumer inflation expectations offered some relief, falling to 4.7% in July from 5.5%, according to the Melbourne Institute. Even so, inflation remains too high for the RBA to declare victory.
The central bank left its Official Cash Rate (OCR) unchanged at 4.35% in June and maintained a cautious message. Policymakers warned that further tightening could still be required if inflation proves more persistent than expected.
Governor Michele Bullock struck a more balanced tone. While keeping the possibility of another rate increase alive, she suggested there was no immediate need to tighten again as the economy was broadly evolving in line with expectations.
Markets expect the RBA to remain on hold at its August meeting while continuing to price the possibility of additional tightening before year-end. So far, nearly 15 basis points of extra tightening are pencilled in by the turn of the year.
That stance provides the AUD with some domestic support, but it is not necessarily enough to trigger an immediate rally. Further gains may require incoming data to strengthen the case for another rate increase.
China steadies but offers little additional liftChina remains an important influence on the Australian currency, although it is currently providing stability rather than a powerful tailwind.
The Chinese economy expanded by 4.3% YoY in the April-June period, Industrial Production rose by 5.3% in the year to June, and Retail Sales increased by a more modest 1.0%.
Business surveys suggest that activity is stabilising. The official Manufacturing and Services PMIs remained slightly above the 50 threshold, while private-sector gauges continued to signal expansion.
China’s trade surplus also widened to $125.62 billion in June from $105.4 billion, supported by stronger imports and exports.
Meanwhile, the People’s Bank of China (PBoC) left its Loan Prime Rates (LPR) unchanged, keeping the one-year rate at 3.00% and the five-year rate at 3.50%.
China is therefore neither delivering a major boost nor creating a significant drag. Unless the data reveal a clearer acceleration or deterioration, Chinese releases may generate short-term volatility without establishing a lasting direction for the pair.
Bearish positioning remains heavy, but momentum is fadingThe speculative mood on the Australian Dollar stayed bearish in the week ended July 28. Commodity Futures Trading Commission (CFTC) data showed net short positions rose to almost 40K contracts from 37.7K a week before.
However, the weekly increase in bearish exposure has decelerated to around 2.3K contracts from 7K previously. That said, the non-commercial players are still building on their downside positions, but with less urgency than earlier this summer.
Open interest also increased slightly to around 229.8K contracts from just above 225K, indicating a slight increase in market participation. In addition, speculative exposure decreased as well to -17.4% (from -16.7%).
The broader trend points to a similar loss of momentum. Indeed, the 4-week change improved to -22.3K contracts from -24.7K, suggesting that cumulative bearish flows are gradually cooling.
Overall, speculators remain firmly bearish on the Aussie, but that view is becoming more established than aggressive. This means the AUD position is increasingly reliant on incoming economic data.
It also creates an interesting asymmetry. Disappointing data could reinforce the prevailing bearish bias, but a convincing improvement in the outlook could trigger a sharper reaction as crowded short positions are unwound.
Jobs data take centre stageAustralia’s July Labour Force report will be the next major domestic test for the Australian Dollar. The release could influence expectations for the RBA’s next move and determine whether AUD/USD can establish itself above 0.7000.
Stronger-than-expected labour data
A solid increase in employment, particularly full-time employment, combined with a stable or lower jobless rate would reinforce the view that the labour market remains tight.
Firm participation and hours-worked figures would add credibility to the headline result. Such an outcome could strengthen expectations of another RBA rate increase and support a sustained move above 0.7000 of the pair.
A broadly balanced report
Employment growth close to expectations, accompanied by little change in unemployment or participation, would probably leave the RBA outlook largely unchanged.
In that case, AUD/USD could remain confined between resistance around 0.7000 and the 200-day SMA just past 0.6900, with its direction determined primarily by the US Dollar and global risk sentiment.
A clear deterioration in the labour market
Weak or negative employment growth, particularly alongside a rise in the Unemployment Rate, would raise questions about the resilience of the Australian economy.
A drop in hours worked or a result driven mainly by part-time employment would make the report look even softer. This could reduce expectations of further RBA tightening and leave spot vulnerable to a renewed test of 0.6900.
Participation will require careful attention. A lower Unemployment Rate caused by people leaving the labour force would be less encouraging than the headline figure might initially suggest.
Beyond the domestic data, traders should continue to monitor US yields, Federal Reserve expectations, Chinese developments, global risk appetite and geopolitical headlines.
Technical landscapeIn the daily chart, AUD/USD trades at 0.6994, holding above the 200-day simple moving average (SMA) at 0.6913 but still capped by the 55-day SMA at 0.7019 and the 100-day SMA at 0.7053, which keeps the near-term tone neutral-to-bearish. Momentum is modestly constructive, with the Relative Strength Index (14) hovering near 51, while the Average Directional Index (14) around 15 suggests a weak, non-trending environment where price is more likely to consolidate beneath these moving average barriers than to embark on a decisive directional move.
On the topside, immediate resistance is clustered at the short-term SMAs, with the 55-day SMA at 0.7019 followed by the 100-day SMA at 0.7053, ahead of a horizontal cap near 0.7079; higher up, the 0.7278–0.7283 region and then 0.7661 mark more substantial medium-term hurdles. On the downside, initial support aligns with the 200-day SMA at 0.6913, before the horizontal floor at 0.6833, while deeper retracements would expose 0.6660 and 0.6593, with 0.6414 and 0.6373 acting as longer-term bearish objectives if selling pressure resumes.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The line in the sand remains 0.6900AUD/USD retains a constructive medium-term structure above its 200-day SMA, but the immediate outlook remains uncertain while the pair struggles to secure a foothold above 0.7000.
The most attractive setup remains conditional. Confirmed acceptance above 0.7000 would favour additional gains and could trigger a positioning-driven short squeeze. Another rejection, however, would leave the pair exposed to a return toward 0.6900.
Until one of these boundaries breaks, AUD/USD remains caught between supportive Australian fundamentals and an external backdrop still dominated by the US Dollar, geopolitical uncertainty and only moderate support from China.
Employment FAQs Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
The AUD/USD pair faces rejection near the 100-day Simple Moving Average (SMA) and retreats slightly after hitting a fresh high since June 17, around the 0.7050 level earlier this Monday. Spot prices slide to the 0.7030-0.7025 region heading into the European session, though the downside potential seems limited amid a supportive fundamental and technical setup.
The US Dollar (USD) stages a goodish recovery from a one-and-a-half-month low, which, along with the disappointing release of China's RatingDog Manufacturing PMI, exerts some pressure on the AUD/USD pair. However, renewed hopes for a US-Iran peace deal and receding US Federal Reserve (Fed) rate hike bets, amid easing inflation fears on the back of a steep decline in oil prices, should cap the USD and help limit the downside for the currency pair.
From a technical perspective, last week's breakout through the 0.7020 barrier, representing the 38.2% Fibonacci retracement level of the May-June downfall, was seen as a key trigger for AUD/USD bulls. Moreover, momentum indicators remain supportive. In fact, the Relative Strength Index is hovering around 57, and the Moving Average Convergence Divergence (MACD) is slightly positive, hinting that buyers still control the short-term bias while facing nearby resistance.
However, the 100-day SMA at 0.7053, followed by the 50.0% retracement at 0.7069, might continue to act as immediate hurdles. A daily close above this cluster would open the way toward the 61.8% retracement at 0.7117 and then 0.7184, ahead of the cycle high near 0.7271.
On the downside, initial support aligns with the 38.2% retracement at 0.7021, with additional layers at 0.6962 and the 200-day SMA at 0.6913, while a deeper retreat would expose the structural floor around 0.6867.
Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The US dollar has come under renewed pressure following last week's FOMC meeting and coordinated support for the Japanese yen by Japan's Ministry of Finance and the US Treasury. The move has fuelled gains in EUR/USD and AUD/USD, while raising fresh questions over whether the Dollar Index has formed a significant top.
US Dollar Outlook: What It Means for EUR/USD and AUD/USD In this video, Matt Simpson analyses the Dollar Index on the daily and weekly charts, highlighting why it may be approaching a key inflection point despite the broader bearish outlook. He also explains why EUR/USD and AUD/USD could be vulnerable to a near-term pullback before attempting to extend their longer-term advances, and discusses the key technical levels to watch ahead of ISM surveys and Non-Farm Payrolls.
The Australian dollar enters the week on a four-week winning streak after broad US dollar weakness following the FOMC meeting and coordinated yen intervention lifted AUD/USD. But with the US dollar index testing a major support zone and ISM and nonfarm payrolls due this week, the Aussie may need a fresh catalyst to extend its gains.
View related analysis:
Japanese Yen Surges as MOF Steals the BOJ's Thunder After FOMC Gold Bounces Within Range After Post-FOMC Dollar Selloff US Dollar Rally Builds Momentum, Crude Oil Holds the Key Australian Dollar Broadly Lower as Soft CPI Reverses RBA Hike Bets AUD/USD Rally Meets DXY Support Ahead of ISM and NFP The Australian dollar largely escaped the extreme volatility seen in the Japanese yen late last week, when several yen crosses unwound moves that had accumulated over the previous three months. The BOJ's suspected intervention shook out what had arguably become crowded long-yen positions, before another bout of yen strength emerged after the US Treasury threw its support behind Japan's efforts.
Meanwhile, expectations for another RBA rate hike eased after Australia's softer-than-expected CPI report. Markets have effectively ruled out a September move, although the cash rate curve is still pricing a small chance of one final 25bp hike by December.
Australia This Week: Economic Data and Events for AUD/USD Traders
Nonfarm Payrolls and ISM Data Could Reshape Fed Expectations The nonfarm payrolls and ISM reports are the main calendar events this week, as they could help reshape Fed policy expectations following last week's slightly less-hawkish than expected decision to leave interest rates on hold. The Middle East flare-up also raises concerns about potential inflationary pressures, with Fed funds futures continuing to price a 74% probability of a September hike and a 41% chance of another in December.
But if recent trends in the ISM services and nonfarm payrolls reports are repeated, it could still leave some doubt over that second hike. Headline job growth has slowed for three consecutive months, from 214k to 57k, although unemployment has edged back to a healthy 4.2%. ISM PMIs also eased slightly while prices paid retreated from their multi-year highs. The risk, of course, is that nonfarm payrolls delivers another strong upside surprise and prices paid rebound on the back of higher crude oil prices in recent weeks. That could lift the probability of a December hike above 50%, support the US dollar, and weigh on AUD/USD.
Source: BLS, ISM, LSEG
AUD/USD Technical Analysis: Australian Dollar vs US Dollar AUD/USD Correlations Face a DXY Reality Check AUD/USD remains most inversely correlated with the US dollar, with the 10-day correlation strengthening to -0.86. Positive correlations with the New Zealand dollar (0.92), copper (0.98) and the yuan (0.83) also remain firm, highlighting the importance of China sentiment and industrial metals. The S&P 500 has swung back to a strong positive correlation (0.89), while WTI crude has flipped negative, suggesting higher oil prices are currently weighing on AUD/USD rather than supporting commodity currencies.
Source: LSEG
AUD/USD Futures Positioning | COT Report The Aussie has continued to defy the bears, rising for a fourth consecutive week and is out of the gates trying to notch up a fifth. Gross shorts continued to trend higher among large speculators and asset managers, dragging speculators' net-short exposure to a seven-month high of nearly 40k contracts.
Yet we should also note the gradual rise in gross longs among asset managers, who have added nearly 14k contracts over the past three weeks (26.4%) to take their gross-long exposure to 13.8k contracts.
Source: CFTC (COT) CME, LSEG
AUD/USD Options and Volatility Analysis (Risk Reversals, HVN Levels) With the US dollar index falling sharply following the FOMC meeting and coordinated yen intervention, AUD/USD has gained another source of support. But with the US dollar now sitting near a key support cluster, a runaway rally is far from assured.
Note that the US dollar index (left) is testing its 200-day EMA, sitting just above the 2026 bullish trendline and the 99.384 swing low. Given the speed of last week's selloff, this support area could prove favourable for dollar bulls over the near term, potentially capping AUD/USD's upside.
US Dollar Support Could Limit AUD/USD Gains AUD/USD (right) is also approaching its prior swing high while the Australia-US 2-year yield spread continues to point lower. That divergence also suggests upside may be limited, particularly if the ISM or nonfarm payrolls reports surprise to the upside, as I suspect they might.
For now, AUD/USD risk reversals continue to edge higher, suggesting demand for calls is increasing relative to puts. Even so, bears may be looking for evidence of a swing high and a pullback towards 70c. A break below that level would bring Thursday's low near 0.6950 into focus.
The most bullish scenario for AUD/USD this week would likely require a combination of weaker-than-expected US economic data and further rounds of yen intervention. For now, the latter appears to be weighing on the US dollar while supporting the Japanese yen.
UBS expects the Australian Dollar to strengthen steadily over the coming year, with AUD/USD forecast at 0.73 by September and 0.76 by June 2027. The Australian Dollar to US Dollar exchange rate (AUD/USD) ended July at 0.7026, having gained 1.65% over the month and more than 5% since the start of the year.
That leaves the pair back above 0.70 after a difficult June, when AUD/USD fell 3.73% and briefly traded below 0.69. See our full history here.
UBS sees the recovery extending well beyond current exchange rate levels.
Its latest global forecasts put AUD/USD at 0.73 in September 2026, 0.74 in December, 0.75 in March 2027 and 0.76 by June.
The final target implies upside of just over 8% from the latest close.
The shape of the forecast matters.
UBS is not looking for one sudden surge.
It expects the pair to rise by roughly one cent in each quarter, pointing to a broader improvement in the Australian Dollar backdrop alongside a gradual weakening of the US currency.
We think that makes the 0.73 September target the key first test.
If AUD/USD can reach and hold that level, the later forecasts at 0.74, 0.75 and 0.76 become much easier to justify. If it fails well before then, the whole path starts to look more vulnerable.
The bank’s wider currency table also supports the view that this is partly a Dollar story.
UBS expects both EUR/USD and GBP/USD to rise over the same period, suggesting it sees a broad retreat in the US Dollar rather than an Australian Dollar move driven by domestic factors alone.
That distinction is important after softer Australian inflation reduced expectations for another near-term Reserve Bank of Australia rate rise.
The absence of an immediate hike removes one potential source of support for the Aussie, but it does not rule out further gains if US yields fall and the Federal Reserve becomes less restrictive.
A favourable global backdrop would help as well.
The Australian Dollar tends to perform better when equity markets are firm, commodity demand is improving and investors are prepared to hold more risk-sensitive currencies.
In our view, UBS’s forecast assumes those external forces will prove strong enough to outweigh any fading support from Australian interest rates.
The pair still has technical work to do before the first target comes into view.
AUD/USD closed July near 0.7026, above the rising 20-day moving average and around the declining 50-day average.
That is a clear improvement from late June, when the exchange rate fell towards 0.6880, but it is not yet a decisive medium-term breakout.
The immediate obstacle is the July high around 0.7044.
A move through 0.7050 would strengthen the recovery and bring 0.7100 back into focus.
Beyond there, resistance is likely around 0.7180-0.7200, followed by the May peak at 0.7277.
We would treat a break above 0.7277 as the point at which the UBS forecast starts to look technically credible.
That would complete the recovery from June’s decline and leave the market within reach of 0.73.
Image: AUD/USD three-month chart showing support near 0.7000, resistance around 0.7045 and the May high at 0.7277 The broader 2026 trend remains constructive, but the May high still guards the path to UBS’s first target The year-to-date chart is more positive than the shorter three-month view.
AUD/USD began 2026 near 0.6670 and has since gained 5.34%.
The pair rallied strongly through January, traded above 0.72 during the spring and reached a year-to-date high at 0.7277 in May.
The subsequent decline was sharp, but the exchange rate held well above its January low before recovering through July.
That leaves the broader upward structure intact.
The 20-day moving average has turned higher, while the 50-day average has begun to flatten.
A sustained hold above 0.70 would keep the recovery on course and increase the likelihood of another test of the spring highs.
Initial support is located around 0.7000, followed by the 20-day average near 0.6970.
A break beneath 0.6970 would weaken the near-term picture and expose the July support zone around 0.6940, with the late-June low near 0.6880 providing the more important downside level.
We would view a move back below 0.6970 as a warning that the July recovery is losing momentum.
Image: AUD/USD year-to-date chart showing the rise from 0.6670, May peak near 0.7277 and July recovery above 0.70 Share article
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UBS’s 0.76 forecast ultimately rests on more than the Australian Dollar story.
A move that far would require a sustained improvement in global risk appetite, supportive commodity conditions and a weaker US Dollar.
The first two targets look achievable if AUD/USD can maintain its position above 0.70 and clear the May high.
The longer-term move towards 0.76 would require a more convincing Dollar decline and a clear break from the broad range that has contained the pair since February.
For now, the technical tone has improved, but the exchange rate remains in recovery rather than full breakout mode.
A close above 0.7277 would materially strengthen the bullish case and place UBS’s 0.73 September forecast within reach.
Higher-for-longer RBA interest rate expectations, persistent domestic inflation, and widening yield differentials against the U.S. Federal Reserve continue to fuel the currency's upward trajectory Broader risk-on sentiment is adding tailwinds, as investors favor growth-sensitive, higher-yielding currencies like the Aussie over safe havens amid improving global market mood The RBA's August 11 decision and upcoming US data could quickly reverse momentum The Australian dollar experienced significant gains this week. Yesterday, it rose over 1% against the US dollar, marking one of its most substantial single-day movements this year. This upward trend continued today, reaching an intraday monthly high of 0.7045.
Zoom out, and the pair is up roughly 9% over the past twelve months. So what’s behind this fresh burst of momentum, and is it something traders should lean into or treat with caution?
What Is Driving this Jump? The main reason for the Aussie dollar’s quick rise is the growing gap in monetary policy between Australia and the United States.
Back home, Reserve Bank of Australia (RBA) Governor Michele Bullock again took a hawkish tone. She warned that underlying inflation is still too high, meaning more interest rate hikes aren’t off the table.
The official RBA Monetary Policy Statement confirms the central bank is determined to bring inflation back to its target. They’re keeping the official cash rate at a high 4.35%. This firm approach has made markets expect a longer period of tight policy compared to other G10 countries.
Concurrently, the US dollar faced headwinds following macroeconomic reports showing a distinct deceleration in second-quarter US GDP growth.
The combination of weaker US economic growth figures and expectations of future monetary easing by the Federal Reserve has put downward pressure on US dollar yields. This situation is prompting a redirection of capital towards commodity-linked currencies, such as the Australian dollar, which offer higher yields.
Secondary support for the Australian dollar comes from commodity prices and global risk appetite. Australia’s export sector is closely tied to industrial metals and energy. Consequently, any improvement in global market sentiment generally benefits the Australian dollar.
Is It Sustainable? That’s the harder question. The rate-differential argument holds only as long as the data keeps cooperating. A hotter-than-expected US inflation print or a surprisingly resilient jobs report could quickly revive Fed-hawkish bets and cap the Aussie’s gains.
On the Australian side, the RBA’s next decision on August 11 is a real event risk. Any indication of concern regarding the currency’s current strength or a resurfacing of growth anxieties could rapidly shift market sentiment. In the near-term, the price range of 0.7045-0.7065 is likely to be the key resistance level to monitor.
What Traders and Investors Should Consider For short-term traders, this market movement appears driven by specific data points and upcoming events, rather than a fundamental change in valuation. Therefore, careful position sizing in anticipation of the RBA announcement and the next US inflation and payrolls data releases is more critical than attempting to capitalize on the immediate breakout.
For longer-term investors, including those with Australian equity or currency exposure, it’s worth remembering not to overreact to a single week’s move. Rate-differential shifts like this can unwind quickly if either central bank changes its guidance.
Why has the Australian dollar risen sharply against the US dollar?
A shifting interest-rate differential is driving it, and markets now expect a more dovish Fed while the RBA looks set to hold rates through 2026.
Should investors increase AUD exposure immediately?
A measured approach is preferable. Confirmation of the breakout and favourable upcoming data would strengthen the case for adding positions.
Will the Reserve Bank of Australia increase interest rates again soon?
While the RBA remains hawkish, recent cooling inflation makes an extended rate hold much more likely.
Asian FX intervention may not be finished yet BOJ surprise hike risk has increased marginally Softer US data adds to dollar pressure AUD/USD and NZD/USD break to fresh highs AUD/USD and NZD/USD ripped higher on Friday, fuelled by broad-based US dollar weakness following apparent coordinated intervention from Asian foreign exchange authorities, softer-than-expected US economic data and a surge in risk appetite after strong earnings from Microsoft and Amazon.
Coordinated intervention rattles the US dollar The biggest driver behind the Australian and New Zealand dollars' outperformance was suspected intervention by Japanese authorities, likely undertaken in coordination with South Korean authorities and with at least tacit support from the United States. The move came with the US dollar already under pressure after the Fed opted against raising rates on Wednesday, providing an ideal backdrop to maximise the impact.
Source: TradingView
An important consideration for traders on Friday is that intervention often doesn't occur in one sitting. Earlier this year, Japanese authorities stepped into the market over several sessions rather than relying on a single operation. If authorities return to the market again, particularly around the Bank of Japan policy decision later in the session, it would point to renewed upside risks for AUD/USD and NZD/USD.
Softer US data adds to dollar headwinds Amplifying the effectiveness of intervention, US economic data broadly disappointed on Thursday. Core PCE inflation rose 0.1% in June, below the 0.2% expected, while the annual rate eased from 3.4% to 3.3%. The unrounded increase was 0.14%, meaning the downside surprise was marginal rather than dramatic.
Accompanying personal income and spending figures were also disappointing. Personal income rose just 0.2%, undershooting expectations, while personal spending increased 0.3%. With spending continuing to outpace income, the household savings rate fell to 2.7%, its lowest level in four years. That questions the sustainability of the strong rebound in consumer spending seen during the June quarter.
US Q2 GDP also disappointed, weighed down by a sizeable drag from net trade that masked underlying strength in business investment and consumer spending. Annualised growth slowed to 1.5%, below the 2.1% consensus forecast. Consumer spending rebounded to a 3.2% annualised pace after a subdued first quarter, while business investment surged 15.2%, continuing to be supported by AI-related capital expenditure. The downside surprise instead reflected a widening trade deficit and inventory drawdowns, which subtracted almost 1.7 percentage points from headline growth.
Risk appetite returns with a vengeance Alongside softer US economic data and suspected intervention, the Aussie and Kiwi ripped higher as risk appetite surged. Strong earnings updates from Microsoft and Amazon fuelled the rally, with Microsoft adding more market value in a single session than any listed company on record.
Given their sensitivity to global risk sentiment, the improvement in sentiment helped drive gains not only against the US dollar, but across most major crosses, with the yen the one exception.
All eyes turn to Tokyo When it comes to what may influence the Aussie and Kiwi on Friday, the events of the past 24 hours suggest risk appetite, the Bank of Japan policy decision and the threat of further intervention from Asian FX authorities will matter far more than economic data. That was reinforced by the total lack of reaction to an upside surprise in Tokyo's July inflation report released early Friday.
Intervention raises the stakes for the BOJ I previewed the Bank of Japan meeting in detail earlier this week, and much of that analysis still holds true. However, the intervention episode over the past 24 hours has increased the risk, at least marginally, of the Bank of Japan moving pre-emptively to raise rates today rather than later in the year, with a full hike already priced into the overnight index swap curve by year-end.
US Treasury Secretary Scott Bessent has made it clear he wants the Bank of Japan to continue normalising policy. If Japanese authorities are already working alongside their South Korean and US counterparts to strengthen the yen through intervention, it raises the question of whether the Bank of Japan may choose to oblige by delivering a surprise rate hike today.
While such a shock outcome would point to a sharply lower USD/JPY and potentially broader US dollar weakness, it would not necessarily be an outright positive for the Australian and New Zealand dollars. They may initially pop against the greenback, but given their sensitivity to shifts in risk appetite, would likely underperform lower-beta currencies if a surprise Bank of Japan hike sparked a broader risk-off episode.
As for when the Bank of Japan decision is likely to drop, it remains a frustration for traders worldwide that there is still no set time for the announcement. Generally, it tends to arrive around 12:30pm Tokyo time, although it can come earlier or later depending on how long the meeting runs. However, the general rule of thumb is that the longer it takes for the decision to drop, the greater the perceived risk that there may be some form of policy shock on the way. So expect markets to become extra twitchy if we extend well beyond 12:30pm Tokyo time.
AUD/USD breakout puts higher levels in play
Source: TradingView
AUD/USD had been coiling in what resembles an ascending triangle before a false downside break followed the softer-than-expected Australian June quarter underlying inflation report on July 29. However, that move has now been completely reversed, with the pair not only breaking back into the triangle structure, but also reclaiming the 50-day moving average and clearing resistance at 0.7020, the top of the structure.
With the price now holding above 0.7020, it provides a level to build long setups around, looking for an extension of the bullish move. Longs could be considered above that level, with a stop below, initially targeting the 100-day moving average at 0.7053 before resistance at 0.7080. A break above the latter would open the door for a potential run towards 0.7200.
The oscillators marginally favour long setups over shorts. RSI(14) has pushed above the neutral 50 level and continues to edge higher, while MACD has flipped into positive territory after staging a bullish crossover earlier this month. It's not a definitively bullish signal, but it does suggest upside momentum is building.
Should AUD/USD slip back below 0.7020 and hold there, it would instead point to a pullback towards the lower boundary of the triangle structure, which comes in around 0.6975 today.
Kiwi joins the breakout party
Source: TradingView
NZD/USD offers a similar technical picture to AUD/USD, breaking higher after grinding higher within an uptrend over recent weeks. The latest surge has seen it break above the confluence of the 50, 100 and 200-day moving averages, along with resistance at 0.5825 and, importantly, 0.5860, a level that has repeatedly acted as both support and resistance over the past couple of months.
The break above 0.5860, taking the pair to its highest level since early June, suggests scope for a further extension of the bullish move. For those looking to play from the long side, longs could be considered while the pair holds above 0.5860, with a stop below, initially targeting 0.5920, another level that has repeatedly acted as support and resistance this year. A break above that would open the door for a retest of the double top at 0.5992 set in May and early June.
The oscillators favour long setups over shorts. RSI(14) has climbed to 64, with the bullish signal reinforced by MACD, which has crossed above the signal line, continues to diverge and remains in positive territory. That suggests upside momentum is building, favouring long setups.
Should NZD/USD slip back below 0.5860 and hold there, it would instead point to a pullback towards the moving average confluence zone and the uptrend, which comes in around 0.5775 today.
Australian Technical Forecast: AUD/USD Weekly Trade Levels AUD/USD has stalled beneath the monthly high after rallying in four of the past five weeks. Aussie has traded within a well-defined range below resistance for three consecutive weeks. A breakout from the current range to provide important directional guidance into August. Event risk on tap into the August open: US ISM services & manufacturing data, ADP employment, and NFPs Resistance 7023, 7116/20 (key), 7208/14- Support 6927, 6877/80 (key), ~6825 AUD/USD heads into the July close locked in a well-defined three-week range just beneath major resistance, leaving the pair at a pivotal technical inflection point. Buyers continue to pressure the upper boundary of the range while sellers have been unable to force a meaningful rejection, underscoring the constructive nature of the monthly recovery without yet confirming a breakout. The focus now shifts to whether the weekly and monthly closes can provide the confirmation needed to resolve this consolidation heading into August. Battle lines drawn on the AUD/USD weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie setup and more. Join live on Monday’s at 8:30am EST.
Australian Dollar Price Chart – AUD/USD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView
Technical Outlook: In my last Australian Dollar Forecast we noted that, “AUD/USD has broken the November uptrend with the bears now facing the first major test of technical support. The weekly & monthly opening ranges are taking shape just above and the focus is on a breakout in the days ahead. From a trading standpoint, rallies would need to be limited to 7023 IF price is heading lower on this stretch with a close below 6877 needed to fuel the next major leg of the decline.” Aussie registered an intraday high at 7027 two-weeks later with price stuck in a well-defined range just below resistance for a third week.
Initial support rests with the 61.8% retracement of the late-June advance at 6927 with key support steady at 6877/80- a region define by the March close low and the 1.618% extension of the May decline. A break / weekly close below this threshold would threaten a deeper correction in the weeks ahead with subsequent support seen a the 52-week moving average (currently ~6824) and the 2025 close high / 38.2% retracement of the yearly range at 6717/57.
A topside breach of this key pivot zone would expose key resistance at the February high-close and the 61.8% retracement at 7116/20. Note that former pitchfork support converges on this threshold in mid-August and strength surpassing this slope would suggest a more significant low is place and potential resumption of the broader uptrend. Look for a larger reaction there IF reached. Subsequent resistance objectives are eyed at the 61.8% retracement of the 2021 decline and the 100% extension of the 2025 rally at 7208/14 and the 2019 swing high at 7295.
Bottom line: AUD/USD has rallied four-of-the-past five-weeks (last week marked a weekly doji) with the bulls testing resistance at the monthly high for a third-consecutive week. The immediate focus heading into August is on a breakout of this range for guidance. From a trading standpoint, losses should be limited to 6927 IF price is heading higher on this stretch with a close above 7023 needed to fuel the next leg of the rally.
Keep in mind we get the release of key ISM data next week with the July Non-Farm Payrolls report on tap Friday. Stay nimble into the monthly cross and watch the weekly closes for guidance into the August open. Review my latest Australian Dollar Short-term Outlook for a closer look at the near-term AUD/USD technical trade levels.
Australia / US Economic Calendar
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts Canadian Dollar (USD/CAD) S&P 500, Nasdaq, Dow Bitcoin (BTC/USD) Japanese Yen (USD/JPY) Euro (EUR/USD) Swiss Franc (USD/CHF) Gold (XAU/USD) British Pound (GBP/USD) US Dollar Index (DXY) --- Written by Michael Boutros, Senior Technical Strategist
The AUD/USD pair turns lower following a modest Asian session uptick to the 0.6965 region on Thursday amid the emergence of some US Dollar (USD) dip-buying. Spot prices, however, hold above an over two-week low, touched on Wednesday, and currently trade around mid-0.6900s, down less than 0.10% for the day.
The growing acceptance that the US Federal Reserve (Fed) will hike interest rates in 2026 amid inflation risks stemming from volatile oil prices, along with escalating US-Iran tensions, helps revive demand for the safe-haven Greenback. Furthermore, soft Australian consumer inflation figures on Wednesday led to some unwinding of near-term Reserve Bank of Australia (RBA) rate hike bets, which undermines the Australian Dollar (AUD) and contributes to capping the AUD/USD pair.
From a technical perspective, the recent repeated failures near the 0.7020 horizontal resistance and the overnight close below the 100-period Exponential Moving Average (EMA) on the 4-hour chart favor bearish traders. Furthermore, the Relative Strength Index (RSI) drifts below the neutral 50 line and Moving Average Convergence Divergence (MACD) stays marginally below zero. Momentum indicators together hint at subdued bullish momentum and a corrective tone after recent losses.
However, it will still be prudent to wait for some follow-through weakness below the overnight swing low, around the 0.6925 region, and a technically significant 200-day Simple Moving Average (SMA) near 0.6900 before positioning for further losses. The AUD/USD pair might then aim to challenge the June monthly swing low, around the 0.6865 zone, and extend the downfall further to the 0.6835 area, or the year-to-date low touched in March, and the 0.6800 round-figure mark.
On the topside, initial resistance is defined by the 100-period EMA at 0.6974. A sustained move above this barrier would be needed to ease immediate downside pressure and open the way for a more constructive recovery. Until then, the AUD/USD pair remains vulnerable to further slippage, with traders likely to fade upticks while spot prices remain capped below the said EMA.
AUD/USD 4-hour chart
Australian Dollar Price This week The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.50%-0.10%-0.08%-0.28%0.67%-0.10%-0.11%EUR0.50%0.38%0.43%0.21%1.18%0.40%0.39%GBP0.10%-0.38%-0.09%-0.17%0.76%0.02%0.00%JPY0.08%-0.43%0.09%-0.21%0.76%-0.02%-0.12%CAD0.28%-0.21%0.17%0.21%0.94%0.19%0.17%AUD-0.67%-1.18%-0.76%-0.76%-0.94%-0.77%-0.80%NZD0.10%-0.40%-0.02%0.02%-0.19%0.77%-0.01%CHF0.11%-0.39%-0.00%0.12%-0.17%0.80%0.01% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Aussie Dollar fell nearly 0.5% on Wednesday morning, following softer-than-expected Australian CPI data (Q2 3.9% from Q1 / forecast 4.1% and monthly indicator Jun 3.8% vs May / forecast 4.0%) that almost sidelined expectations for rate hikes this year.
However, better-than-expected inflation numbers across the Western economies came as a result of recent US/Iran ceasefire, with renewed hostilities likely to revive inflationary pressures and change the current rate outlook.
The pair’s price fell to the lowest levels in nearly two weeks on Wednesday, marking over 50% retracement of 0.6865/0.7026 recovery leg, adding to developing negative signals.
Weakening technical picture on daily chart (south-heading RSI at 42 and 14- momentum hitting the centreline) support fresh bears, with daily close below 50% retracement (0.6945) to confirm signal and keep focus at the downside, though bears are expected to remain in play while the price stays below former range floor (0.6965) reinforced by 20DMA.
Firm break of 0.6945 to expose targets at 0.6926 (Fibo 61.8%) and 0.6900 zone (Fibo 76.4% / 200DMA).
All eyes are on tonight’s FOMC policy announcement, with the US central bank widely expected to keep rates unchanged, but Fed’s stance on near term policy action will be closely monitored.
The AUD/USD pair attracts sellers for the third straight day on Wednesday and dives to an over two-week trough following the release of softer Australian consumer inflation figures. Spot prices, however, rebound a few pips from the Asian session low and currently trade just above mid-0.6900s, still down around 0.25% for the day.
The US Dollar (USD) remains on the back foot below the monthly high, touched on Tuesday, as bulls opt to move to the sidelines ahead of the crucial FOMC policy decision, due later today. This, in turn, offers some support to the AUD/USD pair. However, a fresh escalation of tensions between the US and Iran revives inflation fears. This, in turn, bolstered bets for at least one rate hike by the US Federal Reserve (Fed) in 2026, which favors USD bulls and backs the case for further depreciation for the currency pair.
From a technical perspective, the recent repeated failures to find acceptance above the 0.7000 psychological mark and the latest leg down below the 0.6965-0.6960 confluence support could be seen as a key trigger for AUD/USD bears. The said area marked the lower boundary of a two-week-old range and the 38.2% Fibonacci retracement level of the recent move up from a multi-month low, touched in June. Meanwhile, the Relative Strength Index (RSI) hovers near 38, hinting at lingering downside pressure.
Moreover, the slightly negative Moving Average Convergence Divergence (MACD) suggests that bearish momentum is present but not accelerating decisively. Moreover, an intraday resilience below the 50% retracement level makes it prudent to wait for some follow-through selling below the daily swing low, around the 0.6935 region, before placing fresh bearish bets on the AUD/USD pair. If selling extends, spot prices could fall to the 61.8% level at 0.6926 as traders await the FOMC decision.
Meanwhile, a deeper slide would expose the 78.6% retracement at 0.6898 and the structural floor at 0.6863, levels that could attract dip-buying interest should the current bearish bias persist.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD 4-hour chart
Australian Dollar Price This week The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the British Pound.
USDEURGBPJPYCADAUDNZDCHFUSD-0.05%0.25%-0.15%0.02%0.64%0.22%0.15%EUR0.05%0.28%-0.09%0.06%0.69%0.26%0.19%GBP-0.25%-0.28%-0.48%-0.21%0.42%-0.01%-0.08%JPY0.15%0.09%0.48%0.14%0.76%0.35%0.19%CAD-0.02%-0.06%0.21%-0.14%0.59%0.21%0.13%AUD-0.64%-0.69%-0.42%-0.76%-0.59%-0.42%-0.49%NZD-0.22%-0.26%0.01%-0.35%-0.21%0.42%-0.07%CHF-0.15%-0.19%0.08%-0.19%-0.13%0.49%0.07% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
TL;DR: Australia’s soft CPI print has pushed all four major banks into agreement that the RBA’s tightening cycle is over for now, driving AUD/USD below its rising channel with 0.6750 emerging as the next major support cluster.
Why This CPI Print Changes the Story Australia’s softer inflation report is more than just another downside CPI surprise — it marks the point where markets concluded the RBA’s tightening cycle has effectively run its course. That shift in policy expectations triggered a sharp decline in AUD/USD, but its implications extend well beyond Wednesday’s trading session. With expectations for further RBA tightening fading rapidly, the Australian dollar is losing one of its few remaining domestic pillars of support.
What the Data Actually Showed The inflation data itself offered little justification for another near-term rate increase. Headline CPI slowed from 4.0% to 3.8% y/y in June, while trimmed mean inflation was unchanged at 3.6%. Quarterly figures echoed the same trend, with headline inflation easing from 4.1% to 3.8% and trimmed mean inflation rising only modestly from 3.5% to 3.6%.
The most important detail, however, was how those figures compared with the RBA’s own expectations. Both the monthly and quarterly trimmed mean measures came in below the central bank’s May forecast of 3.8%. That outcome effectively validated Governor Michele Bullock’s remarks on Tuesday that underlying inflation had evolved broadly as expected since May — while also hinting the disinflation process may be progressing slightly faster than policymakers themselves anticipated.
Westpac’s Reversal Seals a Rare Bank Consensus The biggest surprise came from Westpac. Until Wednesday, it had been the only one of Australia’s Big Four banks still forecasting another rate hike in August. Following the CPI release, Westpac abandoned that call, now expecting the RBA to remain on hold for the rest of 2026 — leaving open only a conditional risk of a November hike should inflation reaccelerate sharply during the third quarter.
That revision carries significance beyond a single economist’s forecast. For the first time this tightening cycle, all four major Australian banks are united in expecting the RBA to leave policy unchanged through year-end based on current information. That consensus reinforces the perception that Australia’s monetary tightening phase has probably ended — unless a fresh inflation shock, such as another sustained surge in oil prices, materializes.
Where the Risk Shifts Now: The Fed and Asian Equities Attention therefore shifts away from Australia and toward global developments. Domestically, the policy story is largely settled for now. Externally, however, AUD/USD still faces several potentially bearish catalysts.
The first is the Federal Reserve, with the FOMC rate decision scheduled for today. Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan are widely expected to vote in favor of another rate increase. If additional FOMC members also dissent, markets would likely interpret the outcome as a more hawkish signal than currently anticipated — supporting higher Treasury yields and extending the Dollar’s recent strength. The second is regional risk sentiment. Asian equity markets remain fragile despite Wednesday’s brief rebound. Renewed selling in technology shares has already pushed the KOSPI roughly 17% lower this week, while pressure continues to build across the broader AI sector. Given the Australian dollar’s strong correlation with Asian equity performance and global growth expectations, a deeper regional correction could reinforce downside momentum. ActionForex’s Technical View on AUD/USD The technical picture has already begun reflecting that deteriorating backdrop. AUD/USD broke decisively below its short-term rising channel after once again failing to overcome the falling 55 D EMA near 0.7004. The price action strongly suggests the rebound from 0.6864 ended at 0.7026 as merely a corrective recovery within the broader decline from 0.7277.
As long as rallies remain capped below the 55 4H EMA around 0.6981, the path of least resistance remains lower. A retest of 0.6864 should be seen next, with a sustained break opening the way toward the 61.8% projection of 0.7277 to 0.6864 from 0.7026, at 0.6771. That level sits just above a major medium-term Fibonacci support — the 38.2% retracement of 0.5913 to 0.7277, at 0.6756 — creating a critical support cluster around 0.6750.
Whether buyers are prepared to defend that area should decide whether the broader uptrend from 0.5913 remains intact or gives way to a much deeper medium-term decline.
Key Takeaways Australia’s Q2 trimmed mean CPI came in below the RBA’s own 3.8% May forecast, validating Bullock’s “evolving as expected” framing. Westpac abandoned its lone August hike call, leaving all four major Australian banks aligned on an RBA hold through year-end. Today’s FOMC decision and continued Asian equity weakness (KOSPI down ~17% this week) are now the dominant risks for AUD/USD, not domestic policy. AUD/USD broke its short-term rising channel after failing at the 55 D EMA (0.7004), with the 0.6864–0.7026 rebound now viewed as corrective. 0.6750 is the key support cluster to watch — a break opens a deeper medium-term decline; holding it keeps the broader uptrend from 0.5913 intact.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
/ / Risk-off sentiment is weighing on AUD/USD ahead of Australia's CPI report and the FOMC meeting. Here's what traders should be watching.
28/07/2026
7/28/2026 7:47:00 AM
The Australian dollar is trading on the back foot after a sharp selloff in Asian technology stocks dented risk appetite and dragged regional currencies lower.
With Australia's CPI report due next and the FOMC decision following shortly after, traders face two major macro events that could determine whether AUD/USD extends its recent pullback or regains upside momentum. At the same time, futures positioning, market sentiment and several technical levels suggest the pair may be approaching an important inflection point.
View related analysis:
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TL;DR: RBA Governor Michele Bullock has reframed Wednesday’s Q2 CPI report — the question isn’t whether core inflation is elevated, but whether it’s hot enough above 3.8% to justify an August RBA hike, with AUD/USD stalled at resistance ahead of the release.
Why This CPI Report Matters Australia’s Q2 CPI report is shaping up as the defining domestic event before the Reserve Bank of Australia’s August 11 meeting. But Governor Michele Bullock may have already reframed how markets should interpret the numbers. The issue isn’t whether the RBA retains a tightening bias — it clearly does. The more important question is whether, after three rate hikes this year and a pause in June, there’s any pressing need to tighten again immediately.
Unless Wednesday’s inflation data delivers a meaningful upside surprise, Bullock’s latest remarks suggest policymakers are comfortable giving previous rate increases more time to work.
What Bullock Actually Signaled In a speech today, Bullock left little doubt that another hike remains on the table, stating the Board is “prepared to act as required to achieve its mandate, including by increasing the cash rate further if needed.” Yet that statement was balanced by a more nuanced read on current conditions — she noted that underlying inflation has evolved broadly as expected since May, while acknowledging both housing activity and the labor market have softened more than the RBA had anticipated.
Those developments matter because they point to monetary policy exerting greater restraint on demand than the Bank itself expected only months ago. In other words, Bullock didn’t dilute the tightening bias — she signaled the urgency to use it has diminished.
The Number That Actually Matters: 3.8% That distinction makes Wednesday’s CPI report less about whether inflation remains elevated and more about whether it’s sufficiently stronger than expected to justify acting again in August. The quarterly trimmed mean inflation measure remains the RBA’s preferred guide, with consensus looking for a 0.9% qoq increase after 0.8% previously — lifting the annual pace from 3.6% to 3.7%.
That would mark a fourth consecutive quarterly reading within the 0.8%–1.0% range, confirming underlying inflation remains stubbornly sticky. Critically, it would still sit just below the RBA’s own May Statement on Monetary Policy forecast of 3.8% yoy — and that comparison may matter more than the consensus figure itself:
A print at or above 3.8% would suggest inflation is running hotter than the RBA anticipated, restoring a pressing case for an August hike A print around 3.7% or lower would reinforce Bullock’s view that inflation is evolving as expected, giving the Board little incentive to tighten immediately Headline CPI is expected to rise just 0.7% qoq after 1.4% in Q1, with annual inflation holding at 4.1% thanks to lower fuel prices — comfortably below the RBA’s own May baseline forecast of 4.8%, leaving the policy focus squarely on the trimmed mean.
ActionForex’s Technical View on AUD/USD The rebound from the 0.6864 short-term low has stalled at a key resistance zone: the 55-day EMA (now at 0.7008) and the 38.2% retracement of 0.7277 to 0.6864, at 0.7022.
Three Factors Capping the AUD/USD Rally AUD/USD is facing three headwinds limiting its rally:
Receding RBA hike expectations — Bullock’s tone suggests policymakers are in no rush to tighten again immediately. Elevated Fed rate-hike expectations — a residual effect of the oil shock rather than its current direction. Brent has fallen sharply this week on the US-Iran pause, but at $83–88 it remains well above July’s $70 low, and the month’s spike toward $100+ has left markets pricing meaningfully higher odds of a September Fed hike than two weeks ago. The drag on AUD/USD isn’t where oil trades today — it’s what the month’s move has already done to rate expectations. Deteriorating risk appetite — regional technology stocks continue to struggle, weighing on the Australian Dollar. The KOSPI lost 10.84% today while the Nikkei fell 3.95% as markets reacted to concerns over Nvidia’s “circular financing” model. What Happens Next: CPI, the Fed, and the Path for AUD/USD A stronger-than-expected Q2 CPI print tomorrow might give AUD/USD a brief bounce. But that momentum won’t sustain unless the other two factors resolve. More importantly, the Fed rate decision also lands tomorrow, and a hawkish FOMC vote could easily overturn any CPI-driven boost.
On the other hand, a weaker-than-expected CPI report — or even an in-line print — could finally bring sellers in and push AUD/USD decisively through the 0.6964 minor support and the near-term rising channel floor. That would strongly argue the rebound from 0.6864 has completed as a corrective bounce, with a retest of the 0.6864 low likely next and the broader downtrend from 0.7277 poised to resume.
Key Takeaways The critical CPI threshold is 3.8% yoy trimmed mean — at or above revives August hike odds; at or below 3.7% supports an RBA pause Bullock’s tone suggests the RBA’s tightening bias is intact, but urgency to act again immediately has diminished AUD/USD is capped by three factors: fading RBA hike bets, lingering Fed hawkishness from the oil spike, and risk-off pressure from Asian tech selloffs Wednesday’s Fed decision could overturn any CPI-driven AUD/USD bounce regardless of the print A break below 0.6964 would confirm the rebound from 0.6864 as corrective, opening a retest of that low and a resumption of the downtrend from 0.7277
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
The AUD/USD pair attracts some follow-through selling following the previous day's failure to find acceptance above the 0.7000 psychological mark and weakens to the 0.6970 area during the Asian session on Tuesday. Spot prices move little in reaction to Reserve Bank of Australia (RBA) Governor Michele Bullock’s comments and remain confined in a familiar range held over the past two weeks or so.
The US Dollar (USD) sticks to its bullish undertone as the optimism over a potential US-Iran diplomacy to end a five-month-old conflict fades after Saudi Arabia, Jordan and Iraq reported drone attacks on Monday. This keeps geopolitical risk premium in play and acts as a tailwind for the safe-haven Greenback, exerting some downward pressure on the AUD/USD pair. Traders, however, might refrain from placing aggressive bets ahead of the crucial two-day FOMC policy meeting, starting later today.
The recent repeated failures to break through the 38.2% Fibonacci retracement level of the May-June downfall suggest that the recovery from the 200-day Simple Moving Average (SMA) has run out of steam. That said, the Moving Average Convergence Divergence (MACD) histogram remains marginally positive while the MACD line stays above the signal line, hinting that bullish momentum persists even as the neutral Relative Strength Index (RSI) suggests only modest directional conviction.
Hence, it will be prudent to wait for some follow-through selling below the 23.6% Fibo. level before placing fresh bearish bets on the AUD/USD pair and positioning for a retest of the 200-day SMA at 0.6904. This is followed by the 0.6868 Fibonacci anchor, which reinforces a deeper structural floor should a corrective pullback unfold. On the topside, initial resistance is aligned with the 38.2% Fibo. retracement at 0.7024 ahead of the 50% retracement at 0.7073 and then 0.7121 at the 61.8% Fibo. level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Australian Dollar Price Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.05%0.01%0.02%0.02%0.36%0.18%0.00%EUR-0.05%-0.03%-0.06%-0.06%0.32%0.15%-0.03%GBP-0.01%0.03%0.00%0.02%0.37%0.19%0.03%JPY-0.02%0.06%0.00%-0.00%0.34%0.17%0.02%CAD-0.02%0.06%-0.02%0.00%0.36%0.16%0.02%AUD-0.36%-0.32%-0.37%-0.34%-0.36%-0.16%-0.34%NZD-0.18%-0.15%-0.19%-0.17%-0.16%0.16%-0.15%CHF-0.01%0.03%-0.03%-0.02%-0.02%0.34%0.15% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
The AUD/USD pair struggles to capitalize on a modest bullish gap opening on Monday and oscillates in a narrow band around the 0.7000 psychological mark through the Asian session.
The US Dollar (USD) weakens in reaction to renewed optimism over a potential diplomatic resolution to end a five-month-old US-Iran conflict. Furthermore, a slump in crude oil prices eases inflation fears and tempers US Federal Reserve (Fed) expectations, which is seen as another factor undermining the Greenback.
Adding to this, expectations of another interest rate hike by the Reserve Bank of Australia (RBA) lend additional support to the AUD/USD pair. Traders, however, seem hesitant to place aggressive directional bets and might opt to wait on the sidelines ahead of the crucial FOMC monetary policy meeting this week.
From a technical perspective, the AUD/USD pair keeps a constructive near-term bias above the 23.6% Fibonacci retracement levels of the May-June downfall. This comes on top of the recent goodish rebound from the 200-day Simple Moving Average (SMA) and backs the case for a further near-term appreciation.
Momentum readings also back this mildly bullish stance, with the Relative Strength Index (RSI) hovering just above the 50 line and the Moving Average Convergence Divergence (MACD) holding in positive territory with a modestly positive histogram. This hints that upside pressure is slowly building rather than exhausted.
However, it will still be prudent to wait for sustained strength and acceptance above the 38.2% Fibo. level at 0.7019 before placing fresh bullish bets on the AUD/USD pair and a subsequent move to the 50% retracement at 0.7066. A sustained break above these levels would open the way toward the 61.8% Fibo. at 0.7113 and then 0.7180, with the swing high at 0.7265 acting as a more distant cap.
On the downside, first support emerges at the 23.6% retracement at 0.6961, ahead of the 200-day SMA around 0.6901, while a deeper slide would expose the Fibonacci anchor zone near 0.6867.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.31%-0.20%-0.16%-0.06%-0.29%-0.20%-0.37%EUR0.31%0.08%0.15%0.23%0.01%0.12%-0.06%GBP0.20%-0.08%0.07%0.16%-0.06%0.00%-0.13%JPY0.16%-0.15%-0.07%0.06%-0.14%-0.06%-0.19%CAD0.06%-0.23%-0.16%-0.06%-0.21%-0.13%-0.28%AUD0.29%-0.01%0.06%0.14%0.21%0.11%-0.08%NZD0.20%-0.12%-0.01%0.06%0.13%-0.11%-0.18%CHF0.37%0.06%0.13%0.19%0.28%0.08%0.18% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The Australian Dollar (AUD) trades marginally higher at around 0.6976 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair edges up, but is broadly weak, as surging US Treasury yields due to the revival of hawkish Federal Reserve (Fed) interest rate expectations dampens investors’ risk appetite.
As of writing, 10-year US Treasury Yields trade firmly at around 4.70%, the highest level seen in over 18 months. S&P 500 futures trade cautiously near Thursday’s low at around 7,404, reflecting a risk-off market mood.
According to the CME FedWatch tool, the odds of the Fed delivering an interest rate hike in the policy meeting next week stand at 33.7%, significantly higher than 11.8% recorded last week. Fed’s interest rate hike prospects were also higher at around 34% a month ago, but they eased later after the release of the soft US Consumer Price Index (CPI) data for June.
Surging oil prices due to risks of a prolonged closure of the Strait of Hormuz and the Bab el-Mandeb Strait, critical chokepoints that are collectively responsible for 27% of global energy supply, have boosted inflation projections, a scenario that forces central banks to advocate tight monetary conditions.
Higher US bond yields have also strengthened the US Dollar. At press time, the US Dollar index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near the three-week high at around 101.50.
On the domestic front, Australian employment data for June and the flash S&P Global Purchasing Managers’ Index (PMI) data for July have come in stronger.
On Thursday, the labor market report showed that the economy created 76.3K fresh jobs, significantly higher than 44K in May. Earlier in the day, Australian Composite PMI arrived at 52.6, higher than 50.4 in June.
AUD/USD technical analysis
AUD/USD trades marginally higher at 0.6975, hovering right on the 20-period exponential moving average (EMA) at 0.6975, which acts as a pivotal line for the near-term trend.
The pair is consolidating after recovering from late-January lows, and the neutral stance is reinforced by the Relative Strength Index (RSI) holding just below the 50 mark around 49, hinting at balanced but still fragile momentum.
The Aussie pair might see a fresh upside towards 0.7100 if it breaks above the July 21 high at 0.7027. Looking down, the pair would be exposed to the June 30 low at 0.6865 once it breaks below the July 14 low at 0.6913
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator S&P Global Composite PMI The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging private-business activity in Australia for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the Australian private economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for AUD.
AUD/USD edges lower on Thursday as a stronger US Dollar (USD) outweighs support from stronger-than-expected Australian employment data. At the time of writing, the pair trades around 0.6966, down 0.45% on the day.
The US Dollar gains as the Middle East war lifts safe-haven demand, while the resulting surge in Oil prices adds to inflation worries and strengthens expectations that the Federal Reserve (Fed) may need to raise interest rates.
According to the CME FedWatch Tool, markets now see an 83% chance of a rate hike in September. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.45, its highest level in three weeks.
From a technical standpoint, AUD/USD holds above the 21-day and 200-day Simple Moving Averages (SMAs) at 0.6948 and 0.6896, respectively, keeping the near-term outlook mildly constructive. However, the pair remains capped by the 50-day SMA at 0.7028.
The Relative Strength Index (RSI) near 47 sits just below the neutral 50 level, pointing to subdued momentum. The Moving Average Convergence Divergence (MACD) indicator remains marginally positive, but the fading green histogram suggests that bullish momentum is weakening.
On the upside, initial resistance is seen at the 50-day SMA at 0.7028, followed by the horizontal barrier at 0.7100 and then 0.7250. On the downside, immediate support is located at the 21-day SMA at 0.6948, followed by the 200-day SMA at 0.6896. A sustained break below these levels would expose the 0.6800 mark.
As we all know, the Iran war is severely restricting the flow of Crude Oil through the Strait of Hormuz.
Saudi Arabia started to send more tankers out via the Red Sea, but now, we have a completely different set of problems in the Bab al-Mandab Strait, which is driving crude even higher.
In today’s Market Outlook, let’s take a look at Forex trading on EURNZD, NZDUSD, AUDUSD, AUDNZD, AUDCAD, Silver, XAGUSD, Gold, XAUUSD, WTI, and Brent Crude Oil.
So, the question for traders is, “when can we go short on WTI and Brent CFDs and watch price action fall to normal levels?”
There is no easy answer to this question, but the current US administration is under enormous pressure to end the war, but that may mean nothing in the short term.
This has caused more geopolitical uncertainty, and investors tested the $4,000 level of support on gold, with price heading up past $4,100 this week.
Silver followed gold, as it has been doing for months.
On the technical side, price action has broken through the upper trend line that we have been following for months.
On the weekly charts, we see falling wedges, which are almost always bullish patterns.
But keep in mind, these are weekly charts, so this may take a long time to play out.
This morning we saw Australian Employment Figures way higher than analysts’ expectations, and look what happened.
If we follow the rules of the News Catalyst Fade, we want to trade with the trend or within the range.
We note that in almost every case, the news drove price action WITH the trade buy; we can still look for reversals on other time frames.
We will keep an eye on AUDUSD, for example, where price is at a key level of resistance.
Also on AUDNZD, we see price at a key level with an overbought stochastic oscillator.
And, on AUDCAD, we see a strong ranging market with price at an upper trend line and an overbought stochastic oscillator.
Please feel free to check all other AUD pairs.
We see that NZD has been the strongest currency this month, but we also see that this may be changing.
For example, on NZDUSD, we see a pullback through the lower trend line, but we also see a falling wedge and an oversold stochastic oscillator.
Inflation in New Zealand is not under control, so we will keep an eye on all NZD pairs.
On EURNZD, we see the pullback as well, but with price action forming a rising wedge, and we will keep an eye on this as well.
And tomorrow’s ECB Interest Rate decision, so keep an eye on these and all EUR pairs.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.
The AUD/USD is seeing a cap on its medium-term uptrend move as geopolitical tensions escalate further along the Strait of Hormuz. Current Setup and Live Chart Regarding AUD/USD performance this week, the balance of risks is tilted toward modest weakness, with volatility likely to stay elevated due to market responses to Middle East geopolitical activity and US monetary policy expectations.
Currently, the AUD/USD is trading within a regime of risk sentiment vs safe-haven demand. The AUD currently benefits from resilient commodity exports, backed by the potential for more accommodative Chinese policy support. However, a strong US Dollar and elevated US Treasury yields have overpowered the AUD’s support channels and have put the pair under pressure.
The geopolitical climate is currently in an escalatory phase, which continues to drive safe-haven demand for the greenback at the expense of risk-associated commodity currencies such as the Aussie Dollar. On the other hand, investor sentiment and any positive stimulus developments from China will be the factors the AUD will look to for support. However, the market’s bias is currently for capital preservation via the flight to safety, even as oil prices continue to rise.
AUD/USD Macro Drivers 1) Bullish USD Sentiment
Despite last week’s U.S. inflation data showing a cooling of inflationary pressures in June, the U.S. dollar continues to retain broad-based strength, driving bond yields higher and generating safe-haven demand. The greenback is gaining support from continued expectations of caution on the part of the Federal Reserve in easing rates. Additional support also comes from stronger demand for U.S. government bonds as well as safe-haven flows. The market perception is that the U.S. economy remains resilient and robust, and these factors are expected to cap further rallies in AUD/USD in the near term.
2) China’s Economic Outlook
Australia’s robust export base, as well as the relative stability in commodity prices for gold, copper, natural gas, and iron ore, have helped to boost the country’s terms of trade and have formed a slight cushion against the strengthening of the U.S. dollar. Although this supportive metric has been overwhelmed by safe-haven demand for the greenback, it still offers partial support for the Aussie dollar, limiting the downside potential of the pair.
3) Commodity Prices
Australia’s robust export base, as well as the relative stability in commodity prices for gold, copper, natural gas, and iron ore, have helped to boost the country’s terms of trade and have formed a slight cushion against the strengthening of the U.S. dollar. Although this supportive metric has been overwhelmed by safe-haven demand for the greenback, it still offers partial support for the Aussie dollar, limiting the downside potential of the pair.
Price Catalysts for the AUD/USD 1) US economic data and Federal Reserve expectations
This is a key price catalyst for the AUD/USD. Data around US inflation and employment change (NFP) are critical in shaping the Fed rate expectations. Strong US data leads to a rise in US Treasury yields, which promotes a “higher for longer” Fed policy expectation.
2) Chinese and Australian economic releases: Australian employment change came in at 76.3K, which beat the consensus of 16.4K. The prior number was also revised upwards to 44.0K. The unemployment rate stayed at 4.4%. The robust outlook for the Australian labor market following this data provides for a near-term counter to the US Dollar’s strength, but the medium-term outlook stays in favor of the greenback. Of greater importance to the AUD’s outlook is the Chinese data set that comprises the
Chinese PMIs, industrial production, retail sales, and PBoC policy announcements. These Chinese data are considered critical to Australia’s export outlook.
3) Global risk sentiment: The AUD/USD is highly sensitive to risk sentiment. The Aussie Dollar is favored in risk-on market scenarios, while the US Dollar benefits from safe-haven demand. The current geopolitical tensions around the US-Iran conflict are a risk-averse situation: they promote a flight to safety into the USD. They are negative for both China and the Australian economy. De-escalation promotes risk-seeking sentiment, which is supportive of the Australian dollar.
AUD/USD Forecast Scenarios Base case: neutral to mildly bearish due to the current balance between upbeat Australian employment data to counteract the current US Dollar strength, which is coming from higher US Treasury yields.
Bull case: softer US data and a decline in Treasury yields from the US end, boosted by stronger-than-expected Chinese stimulus measures and an improved environment for risk appetite, will cause commodity currencies such as the AUD to outperform while leading to weakness on the US Dollar.
Bear case: geopolitical escalation that leads to more flight to safety, stronger-than-expected US economic data, and a further rise in Treasury yields will boost the greenback. If there is no support from Chinese economic data, the AUD will be offered, creating a situation where the pair will slide below current support levels.
AUD/USD Technical Outlook Price remains in a medium-term uptrend. However, the latest round of USD strength has kept the pair range-bound, with the 0.7130 resistance and prior highs of 15 August 2022 and 30 January 2023 acting as the upper boundary. The 19 June 2023/16 September 2024 price highs at 0.6886 form the lower boundary.
Fig 1: AUD/USD weekly chart showing key price levels (snapshot taken on 23 July 2026) The bulls need to uncap the upper boundary at 0.7130 to clear a path to the May 2026 high at 0.7276. Beyond this barrier, the next resistance comes in at the November 2021/March 2022 high at 0.7547.
On the flip side, a breakdown of the 0.6886 support unlocks access to downside targets at 0.6796, followed by 0.6596 if the retracement is more extensive. Below this price mark, which is formed by the low of 15 December 2025, a further pivot that holds the lows of May-November 2025 is showcased at 0.6410.
AUDUSD (Australian dollar) finds psychological support
The AUDUSD (Australian dollar) hopes to stop the reversal after finding crucial support at the 0.7000 zone.
Overall, the pair remains bullish to hit a higher high if prices remain above the said support. The RSI’s move to the neutral area triggered the bearish move, which could continue towards 0.6940. Bulls will need to clear 0.7060 before they can hope for a meaningful rebound.
USOIL hits another high
Crude is on the charge after Middle East tensions continue to dominate the headlines.
A series of fresh highs sees bulls remain in control as whispers of the 90.00 level look to be tested soon. On the downside, 86.00 is the first target and bears could look to double down on their positions if prices begin to creep lower. For now, a slight pullback ensues as the black gold awaits the next signal. NAS 100 tech sell-off continues
The Nasdaq looks to take a breather as the bear rally continues.
The index came across some buying interest as tech stocks hope for a fight back. Profit-taking could drive the price lower as there are signs of liquidation. Overall sentiment remains bearish, and trend followers look eager to jump in for another fresh low towards 28200. 29400 is the closest resistance, and 30000 is the obstacle to lift.
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Market Strategist at Orbex David Kindley is a renowned fundamental analyst with over 10 years of trading experience in the financial markets. With a keen eye for macroeconomics and a special focus on trading psychology, David is passionate about helping everyday investors make informed trading decisions through his thorough research and analysis.
