AUD/USD Forecast: 0.71830 as the RBA Keeps the Door Open
- 0.71830 on the 4-hour chart, up 0.31% and printing the highest level of the August advance.
- The RBA held at 4.35% on 11 August for a second consecutive meeting, with minutes describing inflation as too high and excess demand as persistent.
- 0.71540 is the average that has to hold for the trend structure to stay intact.
Fundamental Analysis: AUD/USD
The Reserve Bank of Australia left the cash rate at 4.35% on 11 August, its second hold in a row, and the accompanying minutes were notably less relaxed than the decision itself. Policymakers described inflation as still too high and excess demand as persistent, and flagged that they remain willing to raise rates if upside risks materialise. Inflation expectations have climbed to 4.9%, which is not the profile of a central bank preparing to ease.
The counterweight is the labour market, where employment unexpectedly fell in the most recent reading. That is the single data point most likely to keep the board from acting on its own rhetoric, and it explains why the Australian dollar's strength this month has come with relatively little conviction in rate markets. A central bank that talks hawkishly while employment softens tends to produce a currency that drifts higher rather than one that breaks out.
Layered on top is the dollar side of the equation. The Fed held at 3.50-3.75% on 29 July with three dissents favouring a hike, and roughly a 38% probability of a September increase is currently priced. Yet the dollar sits at three-month lows after the Treasury doubled its liquidity-support buyback operations for longer-dated paper. For now that dollar softness is doing more of the work than anything out of Sydney, which means Friday's PCE release is the more consequential event for this pair.
Technical Analysis: AUD/USD
The structure is a clean stair-step advance. Price based near 0.6980 in the first days of August, worked higher through a series of higher lows, and has now reached 0.71864 at the session high. The pullback on 19 August found buyers well above the prior swing low, which is the behaviour that separates a trend from a range. All four moving averages sit below spot in ascending order at 0.71540, 0.71268, 0.70933 and 0.70588.
Resistance is the 0.71864 high itself, with little structure above it until the 0.7200 handle. Support starts at 0.71540, then 0.71268, with the 19 August reaction low near 0.7100 as the deeper shelf. A close below 0.70933 would invalidate the read by breaking the sequence of higher lows that has defined the month.
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