Analysts at Fonndure review the latest AUD/USD picture, as the pair trades near 0.7015 and extends its winning run while a fresh warning on Australian inflation supports the currency.
Aussie Back Above The 0.70 Handle
AUD/USD has climbed back over the 0.70 handle, and buyers are now defending a pair that has risen for several sessions in a row. The Australian currency leads most of its major peers today, which suggests that the move comes from demand for the Aussie itself and not only from a soft dollar.
Two forces explain the shift. At home, a central bank voice has raised doubts about how fast prices are cooling. Abroad, the US Dollar lacks a clear catalyst while its own central bank stays silent. Together they give the pair a gentle push higher.
The Dollar Waits For The Fed
The Federal Reserve is in its quiet period before the meeting due later this month, so no new signals are coming from policymakers. Traders broadly expect no change in borrowing costs, and the dollar has little reason to rally while it waits.
When one side of a pair offers nothing new, the other side tends to drive the price. That is exactly what is happening here. A central bank on hold gives investors no fresh yield argument for the greenback, while Australia has just handed them one. Until the Fed speaks again, this contrast can keep lifting the pair.
Reading The Daily Chart
On the daily chart the picture is cautiously positive. Price rests slightly above a short-term average, near 0.6995, that follows the last four weeks of trading. Staying above it tells us that dip buyers remain active after the recent gains.
Further down, two rising lines drawn from the 0.69 zone mark the floor of the current advance. They would become important only if the pair loses its footing, but they show where the larger uptrend stands.
Momentum sits in the middle of its range. The RSI hovers a little over the 50 line, so the market is neither crowded with buyers nor short of them. For anyone worried about entering after a rally, that is reassuring, because the pair can still rise without looking stretched.
An Inflation Warning From Australia
The domestic trigger came from a senior figure at the Reserve Bank of Australia, who said that price growth is running hotter than the bank had planned for. Inflation has stayed firm for a long period, and the next quarterly core figure is expected to land above forecasts.
The same official called current policy effective. Even so, a central bank that sees its tools working while the price outlook worsens has good reason to keep borrowing costs high, and possibly to raise them again. Markets quickly added to bets on another increase in the near term.
Higher expected rates attract investors who search for yield, and that demand helped the Australian Dollar. The reaction was rational, but it also means the currency now depends on data. A softer inflation report could erase part of the gain just as quickly.
Support And Resistance Levels
The first hurdle is 0.7020, just above the current price, where a short falling line has capped rallies. A daily close above this area would be an early sign that buyers are taking control.
A heavier barrier waits near 0.7138, where a larger falling line comes into play. A move there would extend the recovery into a broader resistance zone where sellers may return.
Below the market, the first cushion is the moving average near 0.6995. If it gives way, the rising lines near 0.6904 become the zone where buyers are most likely to step in.
What Traders Can Do
With the Fed on hold and the pair pressing against resistance, patience is useful. Waiting for a clear daily close above 0.7020 can help avoid reacting to a brief spike, while a drop under 0.6995 would warn that the short-term momentum is fading.
Position size also deserves attention. Central bank comments can change expectations within minutes, and the coming Australian inflation data could move the pair sharply in either direction. Placing a stop before entering a trade, and keeping it beyond the nearest support or resistance, helps manage that risk.
Conclusion
AUD/USD trades near 0.7015, supported by a hawkish inflation warning from the Reserve Bank of Australia and a cautious US Dollar. The 0.7020 resistance is the first test, with 0.7138 as the larger target, while 0.6995 and 0.6904 form the main support zones.
Traders following Forex strategies should watch Australian inflation data, central bank commentary and the Fed decision, since these events are likely to decide whether the Aussie keeps climbing or pauses near current levels.