AUD/USD Price Forecast: Next on the upside comes 0.6800
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADE- AUD/USD rose further and reclaimed the area above 0.6700.
- The Dollar’s sell-off accompanied the move higher in the pair.
- The RBA will publish its Minutes of the August meeting on Tuesday.
AUD/USD maintained its bullish bias well in place for the third consecutive day on Monday, surpassing the key 0.6700 barrier for the first time since mid-July in quite an auspicious session on Monday.
After breaking through the significant 200-day SMA at 0.6601, the outlook for AUD/USD is expected to improve gradually, potentially supporting the continuation of the uptrend in the short-term horizon.
Monday’s continuation of the monthly uptrend occurred on the back of an extra decline in the US Dollar (USD) and a generalized decent recovery in commodity prices, despite another retracement in iron ore prices. On the latter, it is worth recalling that iron ore futures, in particular, traded at their lowest point in over a year, as disappointing credit data from China, the largest consumer, added to existing concerns about weak demand and high supply.
On the monetary policy front, the Australian dollar has recently gained support from the Reserve Bank of Australia's (RBA) decision to keep the official cash rate (OCR) steady at 4.35%. The RBA has adopted a cautious approach, signalling no immediate plans to ease policy due to persistent domestic inflation. Both trimmed-mean and headline CPI inflation are now expected to reach the midpoint of the 2-3% range by late 2026, later than previously forecasted.
In a subsequent speech, Governor Michelle Bullock reiterated the RBA's readiness to raise interest rates if necessary to manage inflation, maintaining a hawkish stance given the high underlying inflation. She stressed the bank's vigilance regarding inflation risks following the decision to keep rates unchanged. Core inflation, which was at 3.9% last quarter, is projected to fall within the 2-3% target range by late 2025.
Overall, the RBA is expected to be the last among the G10 central banks to start reducing interest rates. The potential for Federal Reserve easing in the medium term, in contrast to the RBA's anticipated prolonged restrictive stance, could support the AUD/USD in the coming months.
However, a slow recovery in the Chinese economy may limit the Australian dollar's rebound. China continues to face post-pandemic issues such as deflation and insufficient stimulus. Concerns about demand from China, the world's second-largest economy, were also raised following the Politburo meeting, which, despite promises of support, did not introduce specific new stimulus measures.
Meanwhile, non-commercial traders (speculators) remain largely net-short on the AUD, as per the latest CFTC report for the week ending on August 13, mainly due to the lack of positive developments from China. Net shorts have predominated since Q2 2021, with only a brief two-week period of interruption.
AUD/USD daily chart
AUD/USD short-term technical outlook
Further increases should take the AUD/USD to the August high of 0.6721 (August 19), ahead of the July top of 0.6798 (July 8) and the December peak of 0.6871.
On the other hand, occasional bearish movements might cause a decline to the 2024 bottom of 0.6347 (August 5) before slipping to the 2023 low of 0.6270 (October 26).
The four-hour chart shows a pick-up in the rising momentum for the time being. That said, the immediate obstacle is at 0.6721, which is ahead of 0.6754 and 0.6798. On the other side, the 200-SMA of 0.6635 offers early support, followed by 0.6560. The RSI increased past 76.
- AUD/USD rose further and reclaimed the area above 0.6700.
- The Dollar’s sell-off accompanied the move higher in the pair.
- The RBA will publish its Minutes of the August meeting on Tuesday.
AUD/USD maintained its bullish bias well in place for the third consecutive day on Monday, surpassing the key 0.6700 barrier for the first time since mid-July in quite an auspicious session on Monday.
After breaking through the significant 200-day SMA at 0.6601, the outlook for AUD/USD is expected to improve gradually, potentially supporting the continuation of the uptrend in the short-term horizon.
Monday’s continuation of the monthly uptrend occurred on the back of an extra decline in the US Dollar (USD) and a generalized decent recovery in commodity prices, despite another retracement in iron ore prices. On the latter, it is worth recalling that iron ore futures, in particular, traded at their lowest point in over a year, as disappointing credit data from China, the largest consumer, added to existing concerns about weak demand and high supply.
On the monetary policy front, the Australian dollar has recently gained support from the Reserve Bank of Australia's (RBA) decision to keep the official cash rate (OCR) steady at 4.35%. The RBA has adopted a cautious approach, signalling no immediate plans to ease policy due to persistent domestic inflation. Both trimmed-mean and headline CPI inflation are now expected to reach the midpoint of the 2-3% range by late 2026, later than previously forecasted.
In a subsequent speech, Governor Michelle Bullock reiterated the RBA's readiness to raise interest rates if necessary to manage inflation, maintaining a hawkish stance given the high underlying inflation. She stressed the bank's vigilance regarding inflation risks following the decision to keep rates unchanged. Core inflation, which was at 3.9% last quarter, is projected to fall within the 2-3% target range by late 2025.
Overall, the RBA is expected to be the last among the G10 central banks to start reducing interest rates. The potential for Federal Reserve easing in the medium term, in contrast to the RBA's anticipated prolonged restrictive stance, could support the AUD/USD in the coming months.
However, a slow recovery in the Chinese economy may limit the Australian dollar's rebound. China continues to face post-pandemic issues such as deflation and insufficient stimulus. Concerns about demand from China, the world's second-largest economy, were also raised following the Politburo meeting, which, despite promises of support, did not introduce specific new stimulus measures.
Meanwhile, non-commercial traders (speculators) remain largely net-short on the AUD, as per the latest CFTC report for the week ending on August 13, mainly due to the lack of positive developments from China. Net shorts have predominated since Q2 2021, with only a brief two-week period of interruption.
AUD/USD daily chart
AUD/USD short-term technical outlook
Further increases should take the AUD/USD to the August high of 0.6721 (August 19), ahead of the July top of 0.6798 (July 8) and the December peak of 0.6871.
On the other hand, occasional bearish movements might cause a decline to the 2024 bottom of 0.6347 (August 5) before slipping to the 2023 low of 0.6270 (October 26).
The four-hour chart shows a pick-up in the rising momentum for the time being. That said, the immediate obstacle is at 0.6721, which is ahead of 0.6754 and 0.6798. On the other side, the 200-SMA of 0.6635 offers early support, followed by 0.6560. The RSI increased past 76.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.