Australian Dollar holds near highs as mixed data keeps RBA tightening bets alive

• AUD/USD is holding near multi-week highs around 0.7100, a touch softer on the day as the US Dollar firms.
• Australia's latest jobs data disappointed, but firmer inflation expectations keep the Reserve Bank of Australia's tightening bias in play.
• Friday's preliminary PMIs are the next domestic test, with the prior surveys all sitting in expansion.

AUD/USD is trading in the 0.7100 neighborhood at the time of writing on Thursday, holding close to multi-week highs after a steady climb off its earlier lows. The pair is marginally weaker on the day as the US Dollar (USD) regains a little ground, but the broader uptrend remains intact.

The most recent Australian employment report came in weak, pointing to a labor market that is cooling faster than expected after months of resilience. Meanwhile, inflation expectations have pushed higher. This mix muddies the outlook rather than clarifying it.

For the Reserve Bank of Australia (RBA), the softer jobs numbers argue for patience, but sticky price pressures and rising expectations keep a tightening bias on the table. The Board held the cash rate at 4.35% at its August meeting and warned it could raise if upside inflation risks build. That lingering hawkish lean is part of what has kept the Aussie supported near its highs.

The near-term focus now shifts to Friday's United States (US) flash Purchasing Managers' Index (PMI) figures, the most important domestic release still to come this week. The previous readings all sat comfortably in expansion, and traders will watch whether that momentum holds.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7115, retaining a modest bullish bias as it holds above both the 20-period Simple Moving Average (SMA) at 0.7104 and the 100-period SMA at 0.7053. The nearby horizontal support at 0.7103 reinforces this constructive stance, while the Relative Strength Index (RSI) around 58 suggests mildly positive momentum without reaching overbought territory.

On the topside, initial resistance aligns at 0.7120, followed closely by clustered barriers at 0.7124 and 0.7132, where buying pressure could start to fade. On the downside, the 20-period SMA at 0.7104 and the horizontal floor at 0.7103 form the first support band, with the 100-period SMA at 0.7053 underpinning the broader advance in case of a deeper pullback.

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