- The AUD/USD outlook stays strongly bullish amid the RBA’s hawkish shift amid inflation strain.
- US greenback stays weak as Fed’s new Chair appointment looms whereas expectations of two price cuts in 2026 mount.
- Technically, the pair is trying to transfer up past December highs of 0.6727.
The AUD/USD value begins 2026 with renewed bullish momentum because the RBA coverage outlook shifts decisively again to inflation threat. 1 / 4 in the past, the consensus was constructed round additional easing, however now the talk is whether or not the subsequent transfer can be a hike. This has materially elevated the enchantment of the Australian greenback.
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The Australian greenback has responded positively to this shift in expectations, climbing towards 0.6700 and buying and selling close to 14-month highs, supported by rising confidence that Australia’s coverage path could quickly diverge farther from that of the US. The Aussie completed 2025 up practically 8%, the strongest annual efficiency since 2020.
Upbeat GDP and CPI, mixed with a resilient labor market regardless of an increase in unemployment, have prompted the RBA to carry a hawkish stance in December. Cash markets take into account this the top of the easing cycle, following three cuts, with the money price remaining at 3.6%. With the danger of reigniting inflationary pressures, market members are eyeing This autumn CPI as a possible coverage catalyst.
This autumn inflation may shock to the upside, because the trimmed imply inflation is already across the higher restrict of the RBA’s goal band. A stronger determine would cement the chances of a 25 bps price hike within the Feb 03 assembly. Though the RBA left no sign for imminent tightening, the December minutes revealed clear circumstances that required increased charges.
You will need to notice that the central financial institution could not provoke an aggressive mountain climbing cycle because the unemployment pattern is anticipated to stay barely increased by way of 2026. Below such circumstances, one hike may push the money price to three.85% adopted by an prolonged maintain till inflationary strain cools.
Throughout the Pacific, the US greenback stays weak amid uncertainty surrounding the brand new Fed Chair and issues in regards to the Fed’s autonomy underneath the Trump administration. Furthermore, markets anticipate two price cuts in 2026, whereas current FOMC minutes revealed a pause till inflation reveals a transparent downtrend.
AUD/USD Technical Outlook: Bullish Momentum Above 20-MA
The AUD/USD value is wobbling close to the 20-period MA round 0.6700 with eyes on the swing excessive space above 0.6720. The pair discovered stable assist close to the 100-period MA at 0.6660 on the final day of 2025. The RSI has moved above the 50.0 stage, indicating additional positive aspects.
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The speedy resistance for the pair lies at 0.6700 (a spherical quantity), forward of the December excessive at 0.6727 after which 0.6750. On the flip aspect, the 100-period MA at 0.6660 gives a robust assist forward of the confluence of the December swing low with the 200-period MA at 0.6600.
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