Go long on AUDUSD with 0.70800 target before Australian employment data comes out

The Australian dollar has been one of the standout performers this week. AUDUSD is currently picking up speed, with upward momentum accelerating after a long consolidation between July 16 and 20. The pair broke through the upper Bollinger Band, climbing to 0.70078 and settling near the top of its daily range.

What's particularly interesting is that this move followed a classic setup: lines tightened ahead of the breakout, which is a textbook precursor to a volatility expansion. Nevertheless, breaking the upper band is a game of two halves: it signals strength, but also warns of stretched conditions. So, if the pair takes a breather, a pullback toward the midline at 0.69300—the first significant line of defense—would not be surprising.

The Relative Strength Index (RSI) backs up the bullish narrative. The indicator climbed all the way from 19 during June's plunge to its current reading—a testament to the recovery's vigor. Yet, with room still left before overbought territory, the door remains wide open for further upside. The Chaikin Oscillator tells a similar story: it crossed into positive territory on July 6 and has mostly stayed there ever since. A brief mid-month dip on the back of profit-taking proved to be fleeting, and the indicator has since bounced back, reaffirming sustained buying appetite.

From a fundamental perspective, the Aussie enjoys a solid tailwind from the Reserve Bank of Australia's (RBA) hawkish resolve. With interest rates locked at 4.35%, the regulator hasn't ruled out another hike as core inflation continues to simmer. Markets are currently pricing in a 76% probability of such a move by December—and Thursday's employment report could be the trigger that tips the scales. Adding fuel to the fire, rising energy prices from Middle East tensions are providing a double boost to the country, improving its trade balance via LNG and coal exports. However, the same geopolitical risks prop up the greenback as a safe haven, capping AUDUSD's potential until the Federal Reserve takes center stage on July 28–29.

For those looking to act, here is the trading plan:

Buy AUDUSD at current levels (0.70080). Place Take profit at 0.70800. Set Stop loss at 0.69500.

This forecast is valid from July 21 till July 28, 2026.