AUD/USD Advances as RBA Inflation Warnings Strengthen Hawkish Outlook

Traders' Opinions

Summary:

AUD/USD climbs to a monthly high near 0.7030 for a fourth straight session as hawkish RBA commentary and stronger Chinese GDP support the Australian Dollar. Traders now await global PMIs, the Fed meeting, US GDP and PCE inflation data for fresh direction.

BUY AUDUSD

EXP

TRADING

0.70345

Entry Price

0.71450

0.69000

0.70215 +0.00188 +0.27%

0.0

Pips

Flat

0.69000

Exit Price

0.70345

Entry Price

0.71450

The Australian Dollar is strengthening against the US Dollar for a fourth consecutive session, with AUD/USD climbing to a fresh monthly high near 0.7030 during Wednesday’s European trading session. The advance extends the pair’s recovery from below 0.6900, its weakest level since early July, reached last week. Growing expectations of tighter monetary policy in Australia are providing fresh support for the currency.

Recent comments from Reserve Bank of Australia officials have reinforced the hawkish outlook. Assistant Governor Christopher Kent said on Monday that there were reasonable indications that neutral interest rates were rising both domestically and globally. Deputy Governor Andrew Hauser added on Wednesday that third-quarter trimmed-mean inflation could exceed expectations, strengthening the case for further monetary tightening ahead of the November 3 policy meeting.

China’s stronger-than-expected third-quarter GDP figures are also supporting the Australian Dollar. Given the importance of Chinese economic activity to Australia’s trade outlook, the improved growth data provide an additional source of optimism for the currency.

The US Dollar, meanwhile, is struggling to attract sustained buying interest as hopes for US-Iran peace talks weigh on demand for the greenback. Nevertheless, uncertainty surrounding the Middle East crisis and the ongoing standoff over the Strait of Hormuz continues to support safe-haven demand. Expectations that the Federal Reserve could raise interest rates again in December, partly because of oil-driven inflation pressures, are also providing some underlying support for the US currency.

Despite these competing forces, AUD/USD has maintained its upward momentum, suggesting that buyers currently retain the advantage. The pair’s recovery reflects the combination of a more hawkish RBA outlook, encouraging Chinese economic data and limited demand for the US Dollar. Any short-term pullback could attract renewed buying interest, although persistent geopolitical risks and shifting Fed expectations remain potential obstacles.

Attention now turns to Friday’s global flash purchasing managers’ index releases for fresh clues about economic conditions. Beyond that, markets will focus on the two-day Federal Open Market Committee meeting beginning next Tuesday, followed by the advance US third-quarter GDP estimate and the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, due next Thursday. These releases could reshape expectations for US monetary policy and determine whether AUD/USD can sustain its recent advance.

Technical Analysis

AUD/USD is demonstrating a strong bullish recovery on the H4 timeframe after rebounding from the 0.6900–0.6920 support zone. The recent price action shows buyers regaining control following the sharp decline from the September highs, with the pair now trading around 0.7027 and approaching a critical resistance area near 0.7025–0.7030. The recovery has established a sequence of higher short-term lows, suggesting that bullish momentum is building as price attempts to reclaim previously broken support levels.

The immediate challenge for buyers is securing a sustained breakout above 0.7030. A decisive move above this barrier could strengthen the bullish structure and allow the pair to advance toward 0.7070–0.7080, where the next resistance zone is located. If buying pressure remains strong beyond that area, the upside could extend toward 0.7140–0.7150, a significant resistance region that previously acted as a support area before the September sell-off. A successful break above this level would expose the next major target around 0.7220–0.7230.

On the downside, the 0.7000–0.7010 region is an important short-term support zone to monitor. If AUD/USD pulls back and holds above this area, it could provide a favorable base for buyers to resume the recovery. However, a sustained move below 0.7000 would weaken the immediate bullish outlook and could trigger a deeper retracement toward 0.6950–0.6960. Further selling pressure could bring the 0.6915–0.6920 support zone back into focus, where the latest recovery began.

Overall, the technical outlook is turning increasingly bullish as AUD/USD approaches the 0.7030 resistance level. The preferred scenario is for price to maintain its position above 0.7000, consolidate, and eventually break higher toward the 0.7070 and 0.7145 targets. However, confirmation remains important because resistance near the current price could produce temporary selling pressure. Traders should watch how the pair reacts around 0.7030 and whether former resistance begins to act as support after a breakout.

TRADE RECOMMENDATION

BUY AUD/USD

ENTRY PRICE: 0.70345

STOP LOSS: 0.6900

TAKE PROFIT: 0.7145

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