Australian Dollar hits fresh one-month high on hot CPI; firmer USD caps ahead of FOMC

Source Fxstreet
  • AUD/USD gains positive traction for the second straight day, though it lacks follow-through.
  • The hot Australian CPI print lifts RBA rate hike bets and provides a goodish boost to the AUD.
  • The USD advances to a two-week high and caps the pair ahead of the crucial FOMC decision.

The AUD/USD pair attracts buyers for the second straight day on Wednesday, rising to a fresh high since September 23, near the 0.7050-0.7055 region during the Asian session following the release of hot Australian consumer inflation figures. Spot prices now seem to have confirmed a breakout through the 100-day Simple Moving Average (SMA) pivotal resistance, though bulls might refrain from placing aggressive bets and opt to wait for the outcome of a two-day FOMC meeting.

The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) rose 0.8% in September, compared to 0.4% in the previous month and consensus estimates of 0.7%. Adding to this, the yearly rate accelerated from 4.0% in August to 4.3% during the reported month, coming in above forecast for a 4.2% print. Moreover, the annual trimmed mean inflation remained above the Reserve Bank of Australia's (RBA) 2-3% target and reaffirmed bets for an imminent interest rate hike in November, which, in turn, provides a modest boost to the Australian Dollar (AUD).

The US Dollar (USD), on the other hand, advances to a two-week high amid the growing acceptance that the Federal Reserve (Fed) will raise borrowing costs again by the year-end amid inflation risks stemming from elevated oil prices. Furthermore, persistent geopolitical uncertainties assist the safe-haven buck to gain positive traction for the fourth consecutive day, capping the upside of the AUD/USD pair. The market focus now shifts to the highly anticipated FOMC rate decision, due to be announced later during the US session, which will play a key role in influencing USD demand.

The US central bank is widely expected to leave interest rates unchanged. Hence, investors will closely scrutinize the accompanying policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference for more cues about the future policy path. In the meantime, the aforementioned supportive fundamental backdrop seems tilted in favor of AUD/USD bulls, suggesting that any meaningful corrective pullback is more likely to be bought into and remain limited.

AUD/USD daily chart

Chart Analysis AUD/USD

Technical Analysis

The AUD/USD pair hovers just above the 100-day Simple Moving Average (SMA) while capped by a dense Fibonacci retracement band overhead. The recovery from recent lows is losing momentum as price holds below the 50% retracement at 0.7066 and the 61.8% retracement at 0.7106, keeping the broader tone neutral to slightly bearish despite the nearby moving average support.

On the downside, initial support is seen at the 100-day SMA at 0.7033, with the 38.2% retracement at 0.7025 reinforcing this floor. A loss of this cluster would expose the 23.6% retracement at 0.6975, ahead of a deeper slide toward the structural base around 0.6893.

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

Economic Indicator

Consumer Price Index (YoY)

The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a comprehensive basket of goods and services acquired by household consumers. The indicator is the primary measure of headline inflation after a new methodology was applied to transition from quarterly to monthly readings, applying to data from April 2024 onwards. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

Read more.

Last release: Wed Oct 28, 2026 00:30

Frequency: Monthly

Actual: 4.3%

Consensus: 4.2%

Previous: 4%

Source: Australian Bureau of Statistics

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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