AUDUSD is currently trading around 0.71600, keeping its upside potential alive. Rising expectations of further monetary tightening by the Reserve Bank of Australia (RBA) are the main factor supporting the Aussie at the moment. Last week’s consumer inflation report showed a monthly increase of 1%, while the annual reading came in above projections at 3.5% versus 3.3%. The core figure also surpassed forecasts, landing at 3.6% year-over-year. The market swiftly responded, boosting bets on a September rate hike. Such a move by the end of 2026 has practically been priced in. Household spending data added further fuel to the fire: the indicator rose by 1.1% month-on-month and 7% year-on-year in July, marking the fastest growth rate in more than three years. Robust domestic demand, combined with continued strength in consumption, creates conditions for keeping borrowing costs above the current 4.35%.
The Aussie also gets a leg up from China’s improved statistics. The Asian country remains Australia’s largest trading partner. The S&P Global China Manufacturing Purchasing Managers’ Index (PMI) rose from 50.9 to 51.5 in August, exceeding market expectations. A pickup in new orders and exports brightens the outlook for Australian natural resources and typically provides positive stimulus for the local currency.
From a technical standpoint, AUDUSD has been moving within an ascending channel for roughly three months, ensuring that buyers maintain their advantage. The key resistance level sits at 0.72750. A confident breakout and consolidation above this threshold could become a driver for continued upward movement, opening the path toward the initial target near 0.75000.
The final recommendation:
— Buy AUDUSD at the current price of 0.71650, aiming for 0.75000 within a month.
— Place a Stop Loss order at 0.69500 for better risk management if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
