Aussie Holds Firm as RBA Path Anchors Sentiment

AUD/USD held a strong tone on March 10 as investors continued to weigh the Reserve Bank of Australia’s policy outlook against a rocky U.S. macro backdrop – and hope that the U.S.-Israel war against Iran will conclude soon. The RBA’s February rate increase to 3.85% and persistent inflation pressures have kept markets alert to the possibility of additional tightening if price growth proves sticky. Recent sentiment indicators in Australia showed a modest rebound in consumer confidence, though readings remain below neutral as higher fuel costs and geopolitical tensions weigh on household outlooks. 

AUD/USD Daily Price History

In the above chart, AUD/USD rates may have started the next leg higher in a bullish breakout. Recent choppiness found support in the form of the 2024 high near 0.6943. Price action took the form of a bull flag – breaking out, retesting the breakout, and consolidating in a range before continuing to fresh yearly highs today – adds evidence to support that view. Momentum is building to the topside anew, with each of the 5-day, 20-day, 50-day, and 100-day exponential moving averages (EMA) securing positive rates of change. The 2023 high at 0.7158, as a last hurdle to clear before the bull flag breakout is validated, potentially seeking a measured move north of 0.7230. 

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