AUD/USD is holding around 0.7200 at the start of the new week, remaining close to its highest level since mid-May after reaching that peak on Friday. The pair continues to benefit from expectations of a September rate hike by the Reserve Bank of Australia (RBA), supported by stronger-than-expected economic growth and persistent domestic inflation.
The Australian Dollar has maintained its recent strength even as the US Dollar struggles to extend gains following the latest US Nonfarm Payrolls report. Traders are now turning their attention to upcoming US inflation data, which could influence expectations for Federal Reserve policy and the broader direction of the dollar.
At the same time, escalating US-Iran tensions are providing some safe-haven support to the Greenback, limiting the upside for AUD/USD. Despite this headwind, the pair continues to hold above the 78.6% Fibonacci retracement of the May-June decline.
RBA bets keep Aussie bulls active
The fundamental backdrop remains supportive for the Australian Dollar as markets increasingly price a potential RBA rate increase. Stronger economic growth and persistent inflation have reinforced expectations that Australian monetary policy could become more restrictive.
The US Dollar, meanwhile, has failed to build a sustained recovery despite stronger US employment data. Reuters reported that markets were pricing roughly a 57% probability of a September Federal Reserve hike, while upcoming inflation figures remain a key catalyst for the dollar.
Key drivers for AUD/USD include:
- Rising expectations for an RBA rate hike in September.
- Stronger-than-expected Australian economic growth.
- Persistent domestic inflation pressures.
- Upcoming US inflation data and Fed rate expectations.
- US-Iran tensions supporting safe-haven demand for the dollar.
The latest market data also shows AUD/USD trading around the 0.7200 area, with the pair remaining close to recent highs.
0.7272 resistance remains key
The technical outlook remains constructive. AUD/USD has gained acceptance above the 78.6% Fibonacci retracement level, while its recent rebound from the vicinity of the 200-day SMA reinforces the broader bullish structure.
Momentum indicators also favor buyers. The RSI is around 66, indicating strong upside momentum but approaching overbought territory, while the MACD histogram remains mildly positive. This combination suggests that bulls retain control, although consolidation could continue if the pair struggles to establish a fresh high.
The main technical levels to watch are:
- 0.7272: Multi-year resistance and the next major upside target.
- 0.7186: Initial support at the 78.6% Fibonacci retracement.
- 0.7118: 61.8% Fibonacci support if 0.7186 breaks.
- 0.7070: 50% retracement level.
- 0.7023: Deeper downside support.
- 0.6989: Rising 200-day SMA and major trend support.
A daily close above 0.7272 would strengthen the bullish AUD/USD price forecast and potentially open the way toward further gains. Conversely, a sustained break below 0.7186 would signal fading upside momentum and expose the pair to 0.7118 and 0.7070.
Conclusion
AUD/USD retains a bullish technical structure while consolidating around 0.7200, supported by rising RBA rate-hike expectations and resilient Australian fundamentals. The 0.7272 multi-year high is the critical upside barrier, while 0.7186 remains the first major support. A breakout above 0.7272 could accelerate the advance, but a break below 0.7186 would warn that the current bullish momentum is losing strength.
Sources & Methodology
Primary-source standard: Market-moving facts should link to original data releases, regulator notices, company filings or official project announcements whenever available. Secondary reporting is used for additional context, not as a substitute for original evidence.
Page last reviewed: