Australian Dollar reaches fresh monthly high as hawkish RBA offsets USD gains

• Having rebounded from a multi-month low, AUD/USD extends its recovery into a fourth consecutive day.
• Hawkish remarks from RBA officials in recent days continue to underpin the Australian dollar.
• Despite support for the USD from geopolitical risks and expectations of a Fed rate rise, the pair continues to advance.

From last week’s trough below 0.6900, its lowest level since early July, AUD/USD extends its rebound for a fourth consecutive day on Wednesday. Recent hawkish remarks from Reserve Bank of Australia (RBA) officials underpin the advance, which takes the pair to a new monthly high near 0.7030 in the first half of the European session.

On Monday, RBA Assistant Governor Christopher Kent pointed to reasonable indications that neutral interest rates are rising both in Australia and worldwide. Earlier today, RBA Deputy Governor Andrew Hauser also cautioned that Q3 trimmed-mean inflation could exceed expectations. His remarks sustain expectations of a rate rise ahead of the 3 November policy meeting. Meanwhile, stronger-than-forecast Q3 GDP figures from China provide further support for the Australian Dollar (AUD).

Hopes of US-Iran peace talks leave the US Dollar (USD) struggling to draw significant buying interest. Nevertheless, uncertainty over the Middle East crisis and the US-Iran confrontation over the Strait of Hormuz keeps the geopolitical risk premium in place. The safe-haven dollar also benefits from a growing conviction that the US Federal Reserve (Fed) will increase borrowing costs again in December as oil prices fuel inflation concerns. Even so, these factors do little to restrain the AUD/USD advance.

Against this backdrop, the balance of risks for spot prices remains tilted upwards, with buyers likely to emerge on any corrective decline. Friday’s global flash PMI releases are next on traders’ radar, although the closely watched two-day FOMC meeting beginning next Tuesday will remain the main focus. Next Thursday’s advance US Q3 GDP estimate and US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure, will also provide direction.

AUD/USD advances on the daily chart

AUD/USD Remains Below Key Technical Resistance

Trading just under the 100-day Simple Moving Average (SMA) at 0.7034, AUD/USD also remains beneath the mid-range 50.0% Fibonacci retracement at 0.7064, leaving the near-term outlook bearish. The overhead resistance cluster, comprising the SMA and successive Fibonacci levels at 0.7104 and 0.7162, continues to limit spot prices, suggesting that rallies could encounter resistance around these levels.

Initial support lies at the 38.2% Fibonacci retracement of 0.7024. Below that, the 23.6% level at 0.6974 provides support for the recent pullback, ahead of a deeper structural floor around 0.6893. While AUD/USD remains beneath the 100-day SMA at 0.7034, a breach of 0.7024 would clear a path towards 0.6974 and potentially 0.6893, while attempts to recover

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