Australian Dollar holds above 0.70 as RBA hike becomes a done deal

• AUD/USD slips as fading Iran hopes sour global risk appetite.
• Markets fully price 25-basis-point RBA hike to 4.85%.
• Australian inflation, trade data follow before key US releases.

The Aussie Dollar dives 0.10% versus the US Dollar as market sentiment deteriorates amid fading US-Iran peace hopes, pushing US bond yields higher while US equity markets fall. Also, price action remained subdued, ahead of the Reserve Bank of Australia (RBA) monetary policy decision. The AUD/USD trades at 0.7016.

AUD/USD stays subdued as geopolitical risks collide with fully priced tightening

A scarce economic docket in the US revealed that the Dallas Fed manufacturing index fell 1.8 points to 9.8 in September but remained above its long-term average of 0.3.  Geopolitical developments and Fed speaking dominated the news headlines.

Fed Governor Lisa Cook said she expects inflationary pressures to build in the coming months, driven by AI and the US-Iran conflict. She acknowledged that the jobs market is well-positioned to handle a cycle of rate increases aimed at tackling inflation.

In Australia, the RBA is expected to raise rates 25 basis points from 4.60% to 4.85%, which would be the highest level since 2008. ANZ analysts expect a split vote, mostly based on “the timing and the apparent preference.”

Money markets are pricing in a 100% chance for a hike by the RBA on September 29, revealed Prime Terminal data.

After the RBA’s decision, traders are eyeing the release of Australia's inflation data and the August Trade Balance. In the US, investors await the jobs data, the release of the Fed’s preferred inflation gauge, Core PCE, and September’s Nonfarm Payrolls report.

AUD/USD Price Forecast: Technical Outlook

In the daily chart, AUD/USD trades at 0.7017, keeping a bearish near-term tone as it slips back under the clustered 100-day and 50-day simple moving averages (SMAs), which now cap the pair around 0.7044 and 0.7093 respectively. The 200-day SMA at 0.6993 acts as underlying trend support, but the Relative Strength Index (14) near 34 suggests persistent downside pressure with the pair edging toward oversold territory rather than staging a decisive recovery.

On the topside, initial resistance is seen at the 100-day SMA around 0.7044, followed by the 50-day SMA near 0.7093, while a horizontal barrier at 0.7198 and the broader downward trend line define a heavier supply zone higher up. On the downside, immediate support aligns with the 200-day SMA close to 0.6993, with a series of rising trend lines from the 0.6865–0.6833 origins offering additional structural demand on deeper pullbacks.

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