AUD/USD Price Forecast: Hot Australian CPI-Driven Rally Eases; Holds Above 0.7000 Ahead of Fed

• Hot Australian CPI lifts AUD/USD to a new one-month high, but further gains prove elusive.
• Safe-haven USD demand, supported by Fed rate-rise expectations and geopolitical risks, limits the pair’s advance.
• With the FOMC decision in focus, the technical picture appears to favour AUD/USD bulls.

Hot Australian consumer inflation figures pushed AUD/USD to a new one-month high during Wednesday’s Asian session, before the pair surrendered some of its intraday advance. Nevertheless, spot prices remain on a positive footing for a second consecutive day, trading around 0.7030 with a daily gain of just over 0.10%.

September’s headline Consumer Price Index (CPI) rose to 4.3% year on year from 4.0%, according to the Australian Bureau of Statistics (ABS). Annual trimmed mean inflation, meanwhile, stayed above the Reserve Bank of Australia’s (RBA) 2-3% target. The figures reinforced expectations of an imminent RBA interest rate rise in November, giving the Australian Dollar (AUD) a sizeable boost. A generally stronger US Dollar (USD), however, is restraining AUD/USD as traders await the conclusion of the two-day FOMC meeting.

Ahead of the key central bank decision, investors appear convinced that the US Federal Reserve (Fed) will maintain its hawkish stance and increase borrowing costs again before the year-end, with high energy prices fuelling inflation concerns. Fears that tensions in the Middle East could escalate further are also keeping the geopolitical risk premium in place. Together, these factors have helped the safe-haven Greenback strengthen for a fourth consecutive day to a two-week high, limiting the scope for AUD/USD to rise.

Above the 38.2% Fibonacci retracement of the September-October decline, spot prices continue to show a positive bias. The Moving Average Convergence Divergence (MACD) has also moved into positive territory and above its signal line, accompanied by an expanding positive histogram. At 53.7, the Relative Strength Index (RSI) points modestly upwards, suggesting that downward pressure is easing. Even so, bullish traders have reason to remain cautious, given AUD/USD’s inability to extend its advance above the 100-day Exponential Moving Average (EMA).

A sustained break and acceptance above the 100-day EMA would therefore be required to support further gains towards the 50.0% retracement at 0.7066, followed by the 61.8% level at 0.7106. Beyond those levels, resistance lies at 0.7164 and the swing high of 0.7238. Should prices fall, the 38.2% Fibonacci retracement at 0.7025 offers initial support, followed by the 23.6% level at 0.6975. A more pronounced decline would bring the structural anchor around 0.6893 into view.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

AUD/USD daily price chart