Australian Dollar Rises as RBA Keeps Hike Risk Alive

AUD/USD moved higher on Tuesday after the Reserve Bank of Australia held the cash rate at 4.35% and kept a hawkish bias in place. The pause was expected, but the message was not dovish. Governor Michele Bullock made clear that another hike remains possible if inflation does not keep moving in the right direction. That gave the Australian Dollar support, with traders treating the decision as a hold with teeth rather than a step toward easing.  

The U.S. side is now the next test. The U.S. Dollar was steady as markets waited for July CPI, with Fed hike odds cooling after the weaker jobs report but not disappearing. Oil remains a complication after renewed Strait of Hormuz tension, because higher energy prices can keep inflation risk alive for both the Fed and the RBA. For AUD/USD, the setup is straightforward: the Australian Dollar has support from an RBA that is still worried about inflation, but follow-through depends on whether U.S. CPI gives the U.S. Dollar a fresh reason to push back. 

AUD/USD Daily Price History

AUD/USD is in better shape than it was in late-June and early-July. The pair has rebuilt from the 0.6880 area, reclaimed the 0.7000 handle, and is now holding above the moving-average cluster. That is constructive. The rising trendline from the late-2025 low is still intact, and the July pullback held well above that longer-term support. The chart has repaired enough to shift the short-term bias from “sell the bounce” to “respect the recovery.” 

The issue is overhead supply. Price is trading near 0.7065, right into the lower end of the old breakdown zone from June. The next real test is 0.7100/30. That area is where prior support turned into resistance, and it is where the Australian Dollar needs follow-through to prove this is more than a relief rally. Momentum is supportive but not explosive. MACD has turned higher and is back above the zero line, while Slow Stochastics are near the upper end of the range and starting to flatten. That says buyers have control, but the easiest part of the bounce may have already happened. 

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