Key Moments
- AUD/USD advanced for a fourth consecutive session during Asian trading, hovering near 0.7200 as rate hike expectations for the RBA strengthened.
- Markets moved to fully price a November RBA rate increase, with roughly a 50% probability now assigned to a September hike, up from 17%.
- Traders are watching Federal Reserve Chair Kevin Warsh’s upcoming Jackson Hole remarks for signals on the future path of U.S. interest rates.
RBA Expectations Fuel AUD Upside
AUD/USD continued its upward momentum for the fourth straight session in Asian trading on Friday, with the pair trading around 0.7200. The Australian Dollar (AUD) remained supported as investors strengthened their expectations for tighter policy from the Reserve Bank of Australia (RBA) following a stronger-than-anticipated July inflation report.
Several major domestic institutions adjusted their projections for the RBA’s cash rate path. National Australia Bank (NAB) now projects the cash rate will reach 4.6% next month. Commonwealth Bank of Australia (CBA) and ANZ forecast the next move in November, while acknowledging that an earlier adjustment is possible.
Market pricing has shifted accordingly. Participants now see roughly a 50% chance of a rate hike at the RBA’s September meeting, compared with 17% previously, and are fully pricing a policy move in November.
Global FX Context and Jackson Hole Focus
Strategists at Societe Generale highlighted that the broader foreign exchange environment remains constructive for higher-yielding currencies, provided U.S. policy keeps bond yields contained. They argued that “as for the bigger picture, as long as the US is trying to keep a lid on Treasury yields, and as long as US growth is holding up, there will be better FX longs in EM than in DM, and continued demand for G10’s highest-yielding currency, the AUD.”
At the same time, attention in global markets is turning to the annual economic symposium in Jackson Hole, Wyoming. Foreign exchange traders are closely tracking an upcoming address from Federal Reserve Chairman Kevin Warsh, looking for any clues on the direction of U.S. monetary policy and interest rates.
Technical Picture: AUD/USD Trades in Overbought Zone
On the daily chart, AUD/USD is trading at 0.7200 and maintains a constructive short-term outlook. The pair is holding comfortably above both the nine-day and 50-day Exponential Moving Averages (EMAs), leaving the short- and medium-term trend signals aligned to the upside. The 14-day Relative Strength Index (RSI) stands at 70.7, indicating overbought conditions and pointing to strong, though potentially stretched, upward momentum following the latest leg higher.
| Technical Level | Description | Approximate Value |
|---|---|---|
| Spot price | Current AUD/USD level on daily chart | 0.7200 |
| RSI (14-day) | Momentum indicator (overbought threshold >= 70) | 70.7 |
| Nine-day EMA | First dynamic support | 0.7160 |
| 50-day EMA | Secondary dynamic support | 0.7070 |
| Horizontal support | Lower boundary levels of the broader bullish structure | 0.6688 / 0.6434 / 0.6348 |
On the downside, initial support is seen at the nine-day EMA near 0.7160. Below that, the 50-day EMA around 0.7070 represents a deeper corrective target, where renewed buying interest would typically be expected while the broader uptrend remains intact. Further below, horizontal support areas sit at 0.6688, then 0.6434 and 0.6348. These lower levels mark the base of the wider bullish configuration and are described as unlikely to be tested unless there is a significant deterioration in sentiment.





