AUD/USD Price Forecast: Holds slight recovery from 0.6960

• AUD/USD recovers slightly to near 0.6972 from the intraday low of 0.6960.
• Hot Australian CPI data for August lends support to the antipodean.
• Investors await the US PCE Inflation data for August.

The Australian Dollar (AUD) holds its recovery move to near 0.6972 from the day’s low of 0.6960 against the US Dollar (USD) during the early European trading session on Wednesday. However, the Aussie pair is still 0.18% down from its Tuesday’s closing price of 0.6985.

The Australian currency finds support after the release of the Australian Consumer Price Index (CPI) data for August, which showed that price pressures accelerated further. Year-on-Year YoY) CPI data arrive at 4%, as expected, higher than 3.55 in July. On a monthly basis, the inflation data growth cools down to 0.4%, in line with estimates from the previous reading of 1%.

Signs of further acceleration in Australian inflationary pressures improve expectations of more interest rate hikes by the Reserve Bank of Australia (RBA) this year. On Tuesday, RBA Governor Michele Bullock signaled that the door for more hikes this year remains open. So far in 2026 the RBA has raised its Official Cash Rate (OCR) four times to 4.6%.

MUFG pointed out after the meeting that the RBA reiterated it will “continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed.”

On the US Dollar front, the US Personal Consumption Expenditure (PCE) Price Index data for August, which will be published at 12:30 GMT.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades at 0.6977, extending its slide below the 20-day exponential moving average (EMA) at 0.7078 and shifting the near-term bias firmly bearish. The pair has fallen back under the 61.8% Fibonacci retracement at 0.7008 after failing to hold gains near the upper retracement band, while the Relative Strength Index (14) around 29 signals oversold conditions that could slow the downside but does not outweigh the prevailing pressure from overhead moving-average and Fibonacci resistance.

On the topside, immediate resistance is now located at the 61.8% retracement at 0.7008, followed by the 50% level at 0.7052 and the 20-day EMA at 0.7078, with additional barriers at the 38.2% retracement at 0.7096 and 23.6% retracement at 0.7150 before the structural anchor near 0.7238. On the downside, initial support appears at the 78.6% retracement around 0.6946, ahead of the recent swing low region marked by the 100% retracement at 0.6866, where sellers may begin to book profits if oversold signals persist.

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