The AUDUSD pair has been on a powerful roll since late November. On Monday, sellers tried to throw cold water on the rally, but today, the tables have turned, and buyers are now in the driver's seat. A decisive move above 0.66 could be the ticket to a push back toward this year's high near 0.67, reached on September 17. Clearing this hurdle is the bulls' number one target, which might further set the stage for a more meaningful correction.
So far, the RSI is sounding the alarm for a pullback, but other technicals have not yet caught on. The MACD indicator turned positive last week and is not in the same league as its mid-September overbought readings. Meanwhile, the price keeps pushing the envelope, widening the gap between the upper and middle Bollinger bands. As long as AUDUSD holds its ground above 0.66, sticking with long positions is a prudent move.
Yesterday's local dip was completely wiped out today after the Reserve Bank of Australia (RBA) dropped the news from its final 2025 policy meeting. The regulator didn't just stand pat on interest rates; it completely shut the door on its monetary easing cycle. Despite the two latest sessions, Governor Michele Bullock didn't mince words, stating flat out that with a tight labor market and stubborn inflation, more cuts are out of the question.
Traders on the hawkish end of the spectrum now expect the RBA to turn up the heat with a rate hike as early as February. Bullock held back a bit, yet she revealed that a borrowing cost rise was on the table for today's discussion. According to polls from Bloomberg and Reuters, May 2026 is the most likely time to pull the trigger. This would make the central bank's easing cycle the shortest in the game among major financial institutions, providing a strong tailwind and solid fundamentals for the AUDUSD rally.
Consider the trading plan down below:
Buy AUDUSD at the current price. Place Take Profit at 0.67. Set Stop Loss at 0.66.
This content is for informational purposes only and is not intended to be investing advice.
