Buying AUDUSD on correction after hitting three-year high

Clear upward momentum pushed AUDUSD to a multi-year high on Monday. Such a surge triggered a technical consolidation on Tuesday, February 10. Short-term overheated conditions are observed in the market. So, to resume its growth, the pair needs to take a breather.

On the daily chart, the price is firmly set above the 20-day exponential moving average (EMA20), which now acts as dynamic support. Quotes are currently trading in the higher third of the channel, confined by the middle and upper Bollinger Bands. This positioning—especially following a band widening—signals strong bullish momentum and heightened volatility. On the other hand, this may also be interpreted as overheated conditions and a potential near-term cooldown.

Meanwhile, the Chaikin Oscillator remains in positive territory, suggesting that buyers are still in control. However, the indicator is hovering near the lower edge of the zone and may slip into neutral if bulls lose their grip on the market.

The pair’s recent jump was driven by the Reserve Bank of Australia’s (RBA) interest rate hike. However, the continuation of policy tightening in May is now in question due to weak macroeconomic data. Consumer spending dropped 0.4% in December, and the Westpac Sentiment Index plummeted 2.6%. Business activity also showed gloomy results, with signs of slowing. These reports have raised doubts about the Australian economy’s resilience to face further hikes, forcing investors to adjust their expectations. Previously, they estimated a 74% probability of monetary tightening in May.

Despite these headwinds, the AUDUSD medium-term outlook remains bullish, underpinned by policy diversion. The US Federal Reserve (Fed) is considering two rate cuts this year. The RBA, on the contrary, has already started a tightening cycle. This gap creates a favorable environment for the pair to rally in the long run.

Keep in mind the following trading strategy:

Buy AUDUSD during a correction in the 0.70500–0.70000 zone, expecting the uptrend to resume. Set Take profit at 0.71500 and Stop loss at 0.69250.

This forecast remains relevant from February 10 till February 17, 2026.