Key Takeaways

-AUD/USD trades near 0.7122, holding above the 0.7100 support zone as buyers attempt to maintain recent gains.

-The Australian dollar remains supported by expectations that the Reserve Bank of Australia (RBA) may keep policy restrictive amid persistent inflation concerns.

-RBA Governor Michele Bullock has highlighted ongoing upside inflation risks, keeping interest-rate expectations as a key driver for AUD/USD.

-The upcoming RBA monetary policy decision on 29 September is becoming the next major catalyst for the Australian dollar.

-Traders are watching 0.7100 support, with 0.7125–0.7126 and 0.7150 as key upside levels.

AUD/USD is consolidating after recovering from lower levels, with price holding around the 0.7120 area as traders balance Australian rate expectations against ongoing US dollar strength.

The latest move reflects shifting expectations around central-bank policy, inflation risks and broader market sentiment. Traders are now assessing whether AUD/USD can maintain support above 0.7100 or if renewed selling pressure could develop.

Why Traders Are Watching AUD/USD

Attention is shifting towards the RBA monetary policy meeting on 29 September, where markets will assess whether policymakers maintain a tighter stance in response to persistent inflation pressures.

RBA Governor Michele Bullock has pointed to ongoing upside inflation risks, supporting expectations that Australian interest rates may remain elevated for longer. A stronger rate outlook could support the Australian dollar by increasing demand for higher-yielding assets.

However, AUD/USD remains sensitive to US monetary policy. The Federal Reserve’s recent rate hike lifted the federal funds target range to 3.75%–4.00%, supporting the US dollar through higher yield expectations.

Key factors influencing AUD/USD include:

-RBA policy outlook: Expectations for further tightening or a prolonged restrictive stance could influence demand for the Australian dollar.

-Federal Reserve policy: Changes in US rate expectations and Treasury yields remain important drivers for the US dollar.

-Inflation data: Future inflation trends in both Australia and the US could shape central-bank decisions.

-Market sentiment: Risk appetite may affect demand for higher-yielding currencies such as the Australian dollar.

Key Trading Levels

AUD/USD is trading around 0.7122 after rebounding from recent lows near 0.7098 and approaching the 0.7125–0.7126 resistance area.

The 0.7125–0.7126 zone remains the immediate upside barrier. A sustained break above this level could support further recovery towards the psychological 0.7150 resistance area.

On the downside, the 0.7100 support level remains the key short-term pivot. A break below this area could weaken the current structure and expose AUD/USD towards 0.7080–0.7090.

AUD/USD Prediction: Can the Aussie Extend Its Recovery Above 0.7150?

AUD/USD’s next move will depend on whether buyers can defend the current support zone while markets await the RBA decision.

A more hawkish RBA outcome could strengthen expectations for higher Australian yields and support AUD/USD towards the 0.7150 resistance level.

However, renewed US dollar strength or a more hawkish Federal Reserve outlook could pressure the pair lower, especially if AUD/USD loses the 0.7100 support area.

For a deeper analysis of AUD/USD’s technical levels, monetary policy catalysts and potential scenarios, read the full article.