Investing in AUDUSD on RBA hawkish policy shift

Fueled by the Reserve Bank of Australia's (RBA) landmark decision to move the dial on its monetary stance, the AUDUSD pair is marching decisively higher toward the 0.70000 threshold. Advanced speculation of this step had already provided underlying support to the market, so the regulator hiked its interest rate to 3.85%, being the first major central bank this year to shift to tightening mode. The trigger was a cocktail of stubbornly high inflation paired with an unexpected drop in unemployment—clear signals of an economy running hot.

This hawkish pivot throws the RBA's stance into sharp relief against a broadly dovish-leaning Federal Reserve, thus opening a supportive yield gap for the Aussie. Although the greenback gained some ground after the nomination of Kevin Warsh to succeed Jerome Powell as new Fed Chair, this factor has largely been digested by traders. The Australian dollar is finding an additional tailwind from rebounding commodity prices, particularly gold, which has stabilized following last week's plunge. 

All eyes are now on RBA Governor Michelle Bullock as she will address the media later today. Any hawkish rhetoric could inject further short-term strength into the national currency.

From a technical standpoint, the pair shows renewed bullish conviction after a healthy correction from the 0.70930 peak. Key momentum indicators suggest the consolidation has run its course. The Stochastic Oscillator (%K=43, %D=60) has cooled from overbought territory and is now in the red. In the meantime, a positive Chaikin Oscillator continues to signal that bulls are in control, even though the buying frenzy has moderated since January.

In fact, the US dollar is enjoying a brief reprieve due to easing geopolitical tensions and solid ISM reports. Yet, the spotlight on monetary policy has swung squarely toward Australia. The RBA's rate hike and its inflation-focused outlook are laying the groundwork for a sustained AUD uptrend. Near-term dips are likely to be shallow and should be treated as chances to enter or add to bullish positions.

Consider the following strategy for your trading:

Buy AUDUSD at the current price. Lock in profits at 0.71570. Place Stop loss at 0.68600.

This forecast holds true from February 3 till February 10, 2026.