AUDUSD is currently trading near 0.69600, remaining under the influence of quite contradictory factors. We are now witnessing a tug-of-war between the Reserve Bank of Australia’s hawkish posture and the ongoing demand for the US dollar. At the same time, the situation in the currency market has gradually shifted since the RBA’s rate hike at its September meeting.
The Australian regulator’s monetary tightening is still the Aussie’s key pillar of support. On September 29, the central bank raised borrowing costs by 25 basis points to 4.60%—the fourth such move since the start of 2026. Why did the RBA act so hawkishly? Sticky inflation is your answer. In August, the annual Consumer Price Index (CPI) hit 4.0%, while the core reading held at 3.6%. Both figures sit significantly above the regulator’s 2%–3% target range. If inflation risks persist, the central bank will have little choice but to keep tightening. In this scenario, the Australian dollar will remain well supported, limiting its potential decline.
A recent shift in market expectations regarding the Federal Reserve’s (Fed) monetary path could provide another tailwind for the Aussie. Much will depend on fresh US inflation and employment data. If these reports suggest a slowdown in the American economy, the probability of an imminent rate hike by the Fed will fade. Consequently, Treasury yields could slide, and demand for the greenback will weaken, creating favorable conditions for AUDUSD to recover. Positive economic readings from Australia could provide an additional boost for the pair.
On the technical side, quotes are now hovering close to an upward-sloping support line, which could signal the start of bullish momentum toward the 0.71000 level.
The final recommendation:
— Buy AUDUSD at the current price of 0.69600, aiming for 0.71000 within one month.
— Place a Stop Loss order at 0.69000 to manage risks if the market moves against us.
This content is for informational purposes only and is not intended to be investing advice.
