Pullbacks to Key Support Zones Offer Fresh Buying Opportunities

Forex

Economic

Summary:

While this suggests price could undergo a short-term retracement, the broader picture shows the RSI dropped to 27 during the previous pullback—falling much lower than on prior occasions.

BUY AUDUSD

EXP

PENDING

0.70850

Entry Price

0.74000

0.69400

0.71691 +0.00041 +0.06%

Pips

PENDING

0.69400

Exit Price

0.70850

Entry Price

0.74000

Inflation in Australia accelerated faster than expected in July. According to the Australian Bureau of Statistics, the Consumer Price Index (CPI) rose 1.0% month-over-month, topping the 0.8% forecast and reversing the 0.1% decline recorded in June. On an annual basis, inflation moderated to 3.5% from 3.8% previously, though it remained above market expectations of 3.2%.

Following the release, market participants raised expectations for further monetary tightening by the Reserve Bank of Australia (RBA). The probability of a rate hike at the September meeting increased to 36% from 17%, while markets continue to price in a high likelihood of an additional increase by February of next year.

Minutes from the RBA's July policy meeting reinforced this outlook, revealing that several board members consider another rate hike "quite possible" if upside inflation risks begin to materialize. Looking ahead, investor attention will turn to second-quarter Gross Domestic Product (GDP) data and the August S&P Global PMI releases.

In China, data published by the National Bureau of Statistics (NBS) showed a slight improvement in manufacturing activity. The manufacturing PMI ticked up to 49.8 in August from 49.2 in July, beating the 49.7 forecast. Meanwhile, the non-manufacturing PMI held steady at 49.0, continuing to signal subdued economic activity.

In the United States, expectations for another interest rate hike by the Federal Reserve (Fed) gained traction following remarks by Chair Kevin Warsh at the Jackson Hole symposium. Warsh emphasized that inflation remains well above the central bank's target and reiterated that interest rates remain the primary tool to restore price stability.

Consequently, markets adjusted their forecasts for the September meeting, pushing the U.S. dollar toward multi-week highs and driving a sharp rise in short-term Treasury yields. The CME FedWatch tool currently prices in roughly a 65% probability of a 25 basis point hike at the Fed's upcoming meeting.

On the geopolitical front, U.S. President Donald Trump stated on Monday that any military action against Iran would be limited. His comments followed reports from Axios indicating that Trump and senior advisors were evaluating targeted strikes in the Strait of Hormuz to prevent Tehran from rebuilding radar and missile capabilities used to threaten maritime traffic.

However, Trump also noted that the Strait of Hormuz is currently "in very good shape" and highlighted that oil flows through the transit route continue as normal, helping ease market concerns over potential global energy supply disruptions. Pullbacks to Key Support Zones Offer Fresh Buying Opportunities_1

Pullbacks to Key Support Zones Offer Fresh Buying Opportunities_1

Technical Analysis

AUDUSD remains in a robust upward trend that recently resumed its upward momentum after approaching the 200-period moving average at 0.6972, while the 100-period average sits at 0.7077. These technical levels align closely with the ascending trendline; as a result, a pullback toward support at 0.7083 could present buying opportunities targeting the psychological level near 0.7400.

Turning to the oscillators, the likelihood of a pullback from current levels increases as the RSI recently touched 70.84, briefly entering overbought territory. While this suggests price could undergo a short-term retracement, the broader picture shows the RSI dropped to 27 during the previous pullback—falling much lower than on prior occasions despite higher price lows—indicating that buyers retain control of the broader trend. Meanwhile, the MACD displays a bullish histogram that is losing depth, confirming that any move lower is likely to act as a temporary correction rather than a trend reversal, keeping the best opportunities tilted to the upside at key support zones.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7085

Target price: 0.7400

Stop loss: 0.6940

Validity: Sep 15, 2026 15:00:00

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Pullbacks to Key Support Zones Offer Fresh Buying Opportunities

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