Insights 
VT 
Key Points
- AUD/USD climbs above 0.659, tracking gains in gold, oil, and iron ore.
- RBA rate cut odds hold at 86% for November; steady policy expected in September.
- Global trade tensions cap upside as Trump urges EU tariffs on China and India.
The latest uptick in the Aussie dollar has been fuelled by a confluence of commodity price surges. Gold remains near record highs, supported by safe-haven flows amid global uncertainty and growing expectations of imminent Federal Reserve rate cuts.
Meanwhile, oil prices gained on renewed Middle East tensions, and iron ore rose as Chinese steel mills ramped up production after maintenance shutdowns.
These commodity moves are significant for the Australian economy, which relies heavily on resource exports. Higher commodity prices improve the country’s terms of trade and typically translate into increased demand for the AUD.
On the monetary policy front, markets currently price in an 86% probability of an RBA rate cut in November, though no change is expected in September. While inflation pressures have eased slightly, the central bank remains cautious amid global uncertainty.
However, risk appetite remains capped by cross-border developments. US President Trump has reportedly urged the EU to introduce 100% tariffs on goods from China and India, escalating global trade tensions. The US is said to be considering similar actions, a move that could weigh on risk-sensitive currencies like the AUD.
Technical Overview
The AUD/USD is trading at 0.6597, up +0.20%, showing resilience as it pushes back toward the 0.6625 resistance zone, last tested in August.
Since bottoming at 0.5921 in April, the pair has been climbing steadily, supported by higher lows and a gradual bullish structure.
The moving averages (5,10,30) are aligned positively, with price staying above the short-term averages. The MACD continues to trend higher, reinforcing bullish momentum.
If buyers manage to break past 0.6625, the pair could open the way toward 0.6700 in the near term.
On the downside, immediate support lies at 0.6500, with stronger backing near 0.6400. As long as the pair holds above these levels, the bias remains upward.
Cautious Forecast
While AUD/USD has shown impressive resilience and is technically poised for a breakout, traders should remain cautious.
A failure to clear 0.6625 could trigger a short-term pullback toward support at 0.6500. Additionally, the pair remains vulnerable to swings in global sentiment, particularly around trade rhetoric and risk-off moves in the broader market.
With the RBA expected to stay on hold this month and a Fed cut potentially coming soon, any hawkish surprise from the RBA or dovish tilt from the Fed could further widen interest rate differentials in AUD’s favour. However, if global tensions intensify or Chinese demand falters, upside may prove limited.
