AUD/USD Forecast: 0.7209 Presses the 0.7220 Range High
- AUD/USD trades at 0.7209, up 0.14%, holding near the top of its August range after a run from the 0.7115 low.
- The RBA is on hold at 4.35% but has told markets it is ready to act if upside inflation risks materialise.
- The 0.7220 area caps the move; the 0.7179 average is the first support that matters.
Fundamental Analysis: AUD/USD
The Australian dollar is being carried by a central bank that has stopped cutting. The Reserve Bank held the cash rate at 4.35% in August and its minutes were blunt: inflation remains too high, risks are skewed upward, and the board is ready to act if those risks materialise. The RBA specifically cited Middle East tensions feeding oil prices, strong AI-related investment, and weak productivity growth as reasons to stay vigilant, while describing current policy as only somewhat restrictive.
The opposing force is that the Federal Reserve is being repriced in the same direction, and faster. The fed funds target has sat at 3.50%-3.75% for five consecutive meetings, but three FOMC members dissented in July in favour of a 25 basis point increase, and markets are now pricing roughly a two-thirds probability of a hike at the September meeting. Ten-year Treasury yields above 4.8% are the visible expression of that. A hawkish Fed is normally a straightforward headwind for AUD/USD.
What has kept the pair bid anyway is the commodity leg. Crude above $91 and copper up sharply on the year both flatter Australia's terms of trade, and the supply constraints behind those moves — Chilean output down 9.4% year on year in July, disrupted Gulf export flows — are not the kind that resolve quickly. The balance leaves AUD/USD in an awkward place: supported by what Australia sells, capped by what the dollar is doing. That is a recipe for a grinding, range-bound advance rather than a clean breakout.
Technical Analysis: AUD/USD
The 4-hour chart shows a rising sequence of higher lows since mid-August, interrupted by a sharp flush to 0.7115 that was bought back within two sessions. That reversal is the swing that started the current leg. Price now trades above all four moving averages, which are stacked in bullish order: 0.7179, 0.7165, 0.7139 and 0.7098 beneath.
Resistance is the 0.7220 high that has now been tested twice without a close above it. Support runs at 0.7179, where the fastest average sits, then 0.7165, with the 0.7139 line marking the base of the advance. A 4-hour close below 0.7139 would break the higher-low structure and invalidate the bullish read.
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