AUD/USD Outlook: Australian Dollar Builds Momentum Above 0.7100 as RBA Rate Hike Bets Support the Aussie

The Australian Dollar (AUD) is heading into Monday trading with positive momentum against the US Dollar after AUD/USD successfully broke above the important 0.7100 level. The pair reached 0.7136 during Friday’s session before settling around 0.7120-0.7124, close to the session highs.

The move higher reflects improving risk appetite and growing expectations that the Reserve Bank of Australia (RBA) could raise interest rates at its September 29 meeting. With buyers now holding above the former June resistance zone, attention is turning toward 0.7168, followed by 0.7200 and 0.7237.

The technical picture is also improving, with the Relative Strength Index (RSI) approaching bullish territory as upward momentum builds.

AUD/USD Market Snapshot

Australian Dollar Breaks Above 0.7100

The most important development in the latest AUD/USD price action is the move through the 0.7100 psychological level.

AUD/USD first cleared the June 15 high of 0.7088, turning that previous resistance area into support. The pair then pushed through 0.7100 and reached 0.7136.

That sequence is technically significant because it shows buyers have been able to overcome several layers of resistance rather than simply producing a temporary intraday move.

The market now needs to establish whether 0.7100 can remain support during Monday’s session.

If it does, the next major technical test is 0.7168.

AUD/USD Price Forecast: 0.7168 Is the Next Major Test

The current week’s high of 0.7168 represents the next important resistance level.

A sustained break above 0.7168 would strengthen the bullish technical structure and place 0.7200 directly in focus.

The 0.7200 level is both psychologically important and technically significant. A move through it could encourage traders to target the 0.7237 September 9 high.

Above 0.7237, the next major upside reference is the 0.7277 May 6 cycle high.

This creates a clearly defined upside pathway:

0.7168 → 0.7200 → 0.7237 → 0.7277

RBA Rate-Hike Expectations Support the Australian Dollar

Monetary policy is an important part of the bullish AUD/USD story.

Markets are increasingly focused on the Reserve Bank of Australia’s September 29 meeting and expectations for another interest-rate increase.

The prospect of higher Australian interest rates can support the Australian Dollar by increasing the relative return available from Australian assets.

This becomes particularly relevant when combined with improving market risk appetite, as the Australian Dollar is traditionally sensitive to changes in global growth expectations, commodities and investor demand for risk-sensitive currencies.

The RBA outlook therefore provides an important fundamental counterpart to the improving technical picture.

Risk Appetite Gives the Aussie Additional Support

AUD/USD is also benefiting from an improvement in broader risk sentiment.

The Australian Dollar is closely linked to global growth expectations because Australia is a major commodity exporter and its economy is sensitive to demand from major trading partners.

When investors become more comfortable with global growth and risk assets, demand for currencies such as the Australian Dollar can increase.

Conversely, a renewed deterioration in global risk appetite could quickly challenge the recent AUD/USD advance.

This means Monday’s trading session will not only be about Australian monetary policy expectations. Movements in equities, commodities, US Treasury yields and the broader US Dollar will also remain important.

RSI Signals Improving Momentum

The Relative Strength Index is another important part of the current setup.

The RSI remains below the traditional overbought threshold but is approaching bullish territory as AUD/USD momentum improves.

That suggests buyers are gaining control without the market yet displaying the extreme momentum associated with an overbought condition.

If the RSI confirms the latest price action, it could support a continuation toward 0.7168 and potentially 0.7200.

However, traders should also monitor the indicator for divergence if AUD/USD reaches new highs without corresponding momentum.

Support Levels to Watch on Monday

Although the immediate structure is bullish, AUD/USD still has several important downside levels.

The first support area is the 50-day SMA at 0.7084.

Below this sits the 100-day SMA at 0.7078, followed closely by the September 16 swing low at 0.7075.

A deeper correction would bring the 200-day SMA at 0.7012 into focus.

The support structure can therefore be mapped as:

0.7084 → 0.7078 → 0.7075 → 0.7012

As long as the pair remains above the 0.7080 region, the recent bullish breakout remains technically relevant.

Bullish Sentiment

1. AUD/USD Has Broken Above 0.7100

The move above 0.7100 represents an important technical development and confirms that buyers have been able to overcome the June resistance area.

2. RBA Rate-Hike Expectations Are Supporting the Aussie

Expectations of a possible RBA rate increase at the September 29 meeting provide a fundamental reason for investors to maintain demand for the Australian Dollar.

3. 0.7168 Could Open the Door to 0.7200

A decisive break above 0.7168 would expose the psychologically important 0.7200 level.

4. RSI Momentum Is Improving

The RSI is approaching bullish territory, suggesting that upward momentum is strengthening rather than simply reflecting a temporary price spike.

5. 0.7237 and 0.7277 Provide Further Upside Targets

If AUD/USD moves through 0.7200, attention would shift toward 0.7237, followed by 0.7277.

Bearish Sentiment

1. AUD/USD Has Not Yet Broken 0.7168

Despite the recent advance, the pair remains below the current week’s high of 0.7168. Failure to clear that level could lead to consolidation or another pullback.

2. The US Dollar Could Regain Strength

The Federal Reserve’s recent rate increase to 3.75%-4.00% has supported the US Dollar, creating a potential headwind for AUD/USD.

If US yields rise further or markets price additional Federal Reserve tightening, the Dollar could regain momentum.

3. A Break Below 0.7084 Would Weaken the Setup

A fall below the 50-day SMA at 0.7084 would undermine the immediate bullish structure and expose the 100-day SMA at 0.7078 and September 16 low at 0.7075.

4. Global Risk Appetite Remains a Key Variable

The Australian Dollar remains sensitive to changes in global risk sentiment. A renewed move away from risk assets could reduce demand for the Aussie even if domestic Australian rate expectations remain supportive.

AUD/USD Price Forecast: What Traders Are Watching Monday

The key level for the start of the new week is 0.7168.

A sustained break above this resistance would place 0.7200 in focus, followed by 0.7237 and potentially 0.7277.

If buyers fail to clear 0.7168, traders will instead monitor whether the pair can maintain support around 0.7100.

A sustained move back below 0.7100 would increase the importance of the 0.7084-0.7075 support zone.

A deeper decline through this area would shift attention toward the 200-day SMA at 0.7012.

The immediate technical battle can therefore be summarised as:

Bullish scenario: 0.7168 break → 0.7200 → 0.7237 → 0.7277

Corrective scenario: 0.7100 failure → 0.7084 → 0.7078 → 0.7075

Deeper bearish scenario: 0.7075 break → 0.7012

Australian Dollar, Commodities and Global Markets

AUD/USD is influenced by more than interest-rate expectations.

Australia’s role as a major exporter of commodities means movements in metals, energy and agricultural markets can affect the Australian Dollar through changes in Australia’s terms of trade and broader growth expectations.

China is also particularly important because of its role as Australia’s largest trading partner and a major source of global commodity demand.

Consequently, traders watching AUD/USD on Monday should monitor the Australian economic outlook alongside Chinese economic developments, commodity prices and movements in the US Dollar.

Currency Hedger View

The latest AUD/USD move demonstrates why businesses and individuals with Australian Dollar exposure need to monitor both technical levels and central-bank expectations.

Currency Hedger is the FX specialist division of Octalas Group, providing managed foreign-exchange services and market intelligence for businesses and personal clients exposed to international currencies.

For AUD/USD exposures, the 0.7100 level has become an important reference point following the recent breakout, while 0.7168 represents the next major upside barrier. A break above that level could bring 0.7200-0.7237 into focus.

Currency Hedger’s market intelligence considers interest rates, inflation, central-bank policy, commodities, geopolitical developments and global currency markets when assessing the environment for international FX exposure.

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Today Markets View

AUD/USD enters Monday trading with buyers having regained control above the important 0.7100 level.

The immediate focus is now 0.7168. A sustained break above that level would put 0.7200 into focus, followed by 0.7237 and the 0.7277 cycle high.

The bullish case is supported by improving momentum, stronger risk appetite and expectations surrounding the RBA’s September 29 policy meeting.

However, the US Dollar remains an important counterweight following the Federal Reserve’s recent rate increase. A renewed Dollar rally or deterioration in global risk appetite could place the recent Australian Dollar advance under pressure.

For Monday, the most important levels are therefore 0.7168 on the upside and 0.7100-0.7084 on the downside.

Louis Roche, Analyst, Today Markets

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