Invest in AUDUSD up to 0.71700 as greenback loses ground

The Australian dollar has been on a tear lately, with AUDUSD hitting new local highs and consolidating near 0.71100. Momentum is clearly on the side of bulls, and the trend speaks for itself. 

Let's start with the charts. Bollinger Bands are green across the board. All three lines are now pointing upward. Not only has the price crossed above the midline, but it also pressed against the upper band. This is a classic setup for a structurally sound uptrend with expanding volatility—buyers couldn't ask for more. In other words, the technical foundation is solid. 

Nevertheless, not every indicator is singing the same tune. The Relative Strength Index (RSI) has been climbing steadily since early July and is now inching toward overbought territory. Although it is a sign of strength, it is also a warning: the higher it climbs, the less room there is for further gains without a pause. Meanwhile, the Chaikin Oscillator is rolling over from its recent peaks, though it remains positive. Such a hidden bearish divergence suggests that bullish conviction may be fading even as the price rises.

Despite these mixed signals, the broader trend is still intact. As long as the pair holds above the Bollinger midline, the current slowdown looks more like a healthy pause than a shift in direction. The most likely path ahead remains upward, with the pair expected to defend the psychological 0.71000 level. If this support gives way, however, a pullback toward the 0.70200–0.70400 zone will follow. This would be a key test for bulls. 

The fundamental backdrop continues to favor the Aussie. Monetary divergence is still a powerful tailwind: the Reserve Bank of Australia (RBA) is holding interest rates at 4.35% with a hawkish bias, while weak US retail sales and inflation data have taken some of the steam out of Federal Reserve (Fed) easing expectations. Add to that improving consumer sentiment and solid employment figures in Australia, and the currency's fundamental case seems to be convincing.

For those ready to act, pay attention to the trading plan down below:

Buy AUDUSD in the 0.70740–0.71000 range. Place Take profit at 0.71700. Set Stop loss at 0.70400.

This forecast is valid from August 18 till August 25, 2026.