Australian Dollar edges higher on renewed RBA hike bets ahead of Bullock, jobs data

• The Australian Dollar benefits from growing expectations that the Australian central bank will raise interest rates again next week.
• Michele Bullock warns that inflation risks remain tilted to the upside.
• Investors await Bullock’s speech on Tuesday and Australian employment data on Thursday.

AUD/USD edges higher on Monday, trading around 0.7130 at the time of writing, up 0.06% on the day. The Australian Dollar (AUD) benefits mainly from strengthening expectations that the Reserve Bank of Australia (RBA) could raise interest rates again at its monetary policy meeting next week.

The RBA has already raised its Official Cash Rate (OCR) by 75 basis points (bps) this year to 4.35%, as persistent inflationary pressures continue to concern policymakers. RBA Governor Michele Bullock reinforced further tightening bets last week during an appearance before the Parliamentary Treasury Committee. Bullock warned that inflation risks remain tilted to the upside and said the key question is whether the monetary tightening delivered so far will be sufficient to return inflation to target within a reasonable timeframe.

Attention now turns to another appearance by Bullock, scheduled for Tuesday during a fireside chat in Sydney. Investors will look for fresh clues about next week’s decision and the possibility of further monetary tightening.

Australian labor market data, due on Thursday, will also be an important event for the Australian Dollar. Further signs of resilience in employment could reinforce expectations of tighter monetary policy from the RBA and provide additional support to the Aussie.

On the US side, the US Dollar (USD) remains supported by expectations of further interest rate hikes from the Federal Reserve (Fed), as policymakers continue to signal concerns about inflationary pressures.

Minneapolis Fed President Neel Kashkari said over the weekend that inflation remains too high across the US economy and that price pressures are not solely driven by higher Oil prices. These comments keep expectations of restrictive US monetary policy alive and could limit gains in AUD/USD.

Finally, trade relations between the United States (US) and China could also influence the pair this week. US President Donald Trump and Chinese President Xi Jinping are scheduled to meet in Washington on Thursday to discuss the tariff truce between the two countries. Developments surrounding China remain particularly important for the Australian Dollar given the close trade ties between the Australian and Chinese economies.

AUD/USD technical analysis

In the one-hour chart, AUD/USD trades at 0.7130. The pair holds a neutral-to-slightly-bullish tone as it trades above the 100-period simple moving average (SMA) at 0.7120 but remains capped by the 200-period SMA at 0.7147. Immediate overhead pressure is reinforced by the nearby horizontal resistance at 0.7140, while a mildly positive Relative Strength Index (RSI) around 57 suggests buyers still retain some control, though without strong momentum.

On the topside, initial resistance is aligned at 0.7140, followed by the 200-period SMA at 0.7147 and then the next horizontal barrier near 0.7188. On the downside, the 100-period SMA at 0.7120 offers first support, ahead of the 0.7105 and 0.7075 horizontal levels, which define a broader demand zone that would need to give way to signal a deeper corrective slide.

(The technical analysis of this story was written with the help of an AI tool. Know more.)