Today market outlook

[Zeologic]

AUD/USD shows a bullish bias, signaling "risk-on" market sentiment.

The AUD/USD commodity currency pair is exhibiting a bullish bias, having climbed from a low of 0.68655 on June 30 to a high around 0.71800 last week. Currently, the price sits near 0.71668 on the FXOpen chart, just below the upper band.

AUD/USD is currently driven by three key factors: the RBA's hawkish stance, the Federal Reserve's interest rate trajectory, and economic conditions in China—Australia's largest trading partner.

The RBA maintains a hawkish tone; meeting minutes reveal debates regarding potential further rate hikes, as Australian inflation remains above the 2%–3% target range. The benchmark interest rate currently stands at 4.35%. With inflation remaining elevated, the market has not entirely ruled out the possibility of additional rate hikes through late 2026.

Improving sentiment regarding China's economy, alongside economic stimulus measures, could bolster Australian exports—particularly commodities such as iron ore and coal.

However, downward pressures could push the AUD into bearish territory. US inflation data (PCE) and speeches by Federal Reserve officials remain the focus this week. If US inflation exceeds forecasts, the USD could strengthen on expectations of higher interest rates. Geopolitical tensions in the Middle East may drive safe-haven demand for the USD, while a global economic slowdown and weakening commodity demand could also weigh on the AUD.

Traders are currently monitoring Australian CPI data, RBA rate hike expectations, US PCE data and Fed commentary, commodity price movements, Chinese economic data, and the performance of the US Dollar Index (DXY).

From a technical perspective, AUD/USD is trading above the 200-day moving average, with a trend leaning from neutral to mildly bullish today. The projected fair value range for AUD/USD is 0.70800–0.72000. Immediate support lies around 0.71200, with the next target level near 0.70900. The nearest resistance is around 0.71780, and the next target is around 0.72000. This forecast could be wrong.