AUD/USD Price Forecast: Remains depressed near 0.7150 on firm USD, reduced RBA hike bets
بواسطة Haresh Menghani
تم التحديث: 29 May 2026
المقالات الشائعة
The AUD/USD pair attracts fresh sellers on Friday, stalling the previous day's goodish recovery move from sub-0.7100 levels or a one-week low.
- AUD/USD struggles to capitalize on the overnight bounce from a one-week low.
- hawkish Fed bets and Iran peace doubts support the USD, weighing on the pair.
- Reduced RBA rate hike bets undermine the AUD and contribute to the downtick.
The AUD/USD pair attracts fresh sellers on Friday, stalling the previous day's goodish recovery move from sub-0.7100 levels or a one-week low. The downtick, however, lacks bearish conviction, with spot prices trading around mid-0.7100s during the first half of the European session amid a broadly firmer US Dollar (USD).
Despite reports of a potential US-Iran peace deal, investors remain skeptical about the fragile ceasefire amid disagreements over Tehran's nuclear program and the Strait of Hormuz. Adding to this, a rise in US inflation at the fastest pace in three years reaffirmed expectations that the US Federal Reserve (Fed) will raise borrowing costs and turns out to be another factor lending support to the Greenback. Furthermore, reduced bets for a June interest rate hike by the Reserve Bank of Australia (RBA) weigh on the Australian Dollar (AUD) and exert pressure on the AUD/USD pair.
Spot prices hold in a capped stance following the recent breakdown below the 0.7180-0.7185 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 23.6% Fibonacci retracement level of the March-May upswing. This reinforces a tight resistance band overhead, though repeated failures to find acceptance below the 38.2% Fibo. level warrant caution for the AUD/USD bears and before positioning for deeper losses.
Moreover, momentum signals are mildly constructive, with the Relative Strength Index hovering near 53 and the Moving Average Convergence Divergence (MACD) line slightly positive. This, however, only hints at stabilizing pressure rather than a clear breakout above the prevailing ceiling. Hence, a sustained move above this zone would be needed to ease the current cap and expose the next barrier around 0.7279, or a four-year high set earlier this month.
On the downside, initial support is aligned with the 38.2% Fibo. level at 0.7109, followed by deeper retracement floors at 0.7056 and 0.7003. A convincing break below the latter would reopen the path toward the lower Fibonacci supports at 0.6928 and the cycle low near 0.6833.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD 4-hour chart
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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