AUD/USD Market Analysis: Price Forecast

The AUD/USD enters September, maintaining its July-August recovery from the 0.6865 low, moving to area to a 0.7214 high as of today 4th September. The short-term picture is constructive but the pair is testing a recent high zone just as US inflation data and the 15-16 September FOMC meeting approach.

AUD/USD Market overview

The Australian dollar gained about 2.6% from the early-August low through the 3 September close. That move places AUD/USD near the top of its 2026 observed price range. A sustained break above the late-August high would improve the technical picture; but repeated failure here to test the highs would keep the pair vulnerable to another pullback.

Australia retains a 4.35% cash rate after the RBA held in August, while the next FOMC meeting is soon approaching. As a result, shifts in US rate expectations and broad risk sentiment can have an effect on the US-dollar side of the currency pair.

Latest market news for AUD/USD

Australia's July CPI rose 3.5% year on year, easing from 3.8% in June, while trimmed-mean inflation held at 3.6%. The mix offers some relief on headline inflation but leaves underlying inflation above the RBA's 2-3% target band. At its 11 August meeting, the RBA left the cash rate at 4.35% and said it would remain attentive to data and could raise the rate further if upside inflation risks materialised.

In the United States, the August inflation report is scheduled for 11 September, shortly before the 15-16 September FOMC meeting. Recent reporting has highlighted that the policy outlook remains sensitive to incoming inflation data. This makes the U.S dollar response to inflation, rate expectations and the FOMC communication a central near-term risk for AUD/USD.

AUD/USD technical analysis

The daily short-term structure is a sequence of daily higher-highs and higher lows from 0.6865 to 0.7214. Momentum has been consistent during the advance, but the 0.7200 area is the immediate technical resistance test because it contains the latest swing high. The 0.7125 area is the first important support, holding above it would suggest buyers are willing to support it, while a decisive break below it could weaken the short-term bullish picture.

Fundamental and macro drivers

The RBA's policy stance remains relatively firm. The Board judged monetary policy somewhat restrictive, but also said inflation was still too high and its return to the target midpoint was not expected until late 2027. The July CPI slowdown reduces some immediate pressure, yet the unchanged 3.6% trimmed-mean reading leaves policy expectations sensitive to further price and activity data.

The U.S. side is more event-driven over the next two weeks. A softer-than-expected US inflation result could lower US yields and weigh on the dollar, supporting AUD/USD. Conversely, inflation that remains sticky could reinforce higher-for-longer expectations or expectations of further tightening, supporting the dollar. The Australian dollar can also respond to global growth expectations and risk appetite, so a deterioration in those conditions remains a separate downside risk even if domestic Australian data are resilient.

Bullish scenario for AUD/USD

A short-term bullish AUD/USD scenario may gain support if price holds above 0.7125 and then achieves a break-out above 0.7200. A benign US inflation outcome, lower US rate expectations, or a less restrictive FOMC message could provide the macro catalysts for that move. In that case, the next area traders may watch is the round 0.7275 zone. This scenario would lose short-term technical momentum on a return below the 0.7125 support area.

Bearish scenario AUD/USD

A short-term bearish scenario may develop if AUD/USD fails repeatedly near the 0.7200 area and trades back below 0.7125, especially if US inflation surprises higher or the FOMC reinforces a restrictive path. Such a move could expose 0.7025 first and then the 0.6925 area. A push through 0.7200 could invalidate the immediate bearish scenario.

Key levels and catalysts to watch

• Support: 0.7125, 0.7025, then 0.6925
• Resistance: 0.7200, then 0.7275

Catalysts

• 11 September: US August inflation report, a key input for Fed expectations.
• 15-16 September: FOMC meeting and policy communication.
• 29 September: next RBA policy decision, outside this report horizon but increasingly relevant as the period progresses.

Conclusion

AUD/USD maintains its recovery from its late-June low and remains technically constructive in the short-term while it holds above the 0.7125 support area. However, the pair is also finding resistance at the recent 0.7200 high, and moving into a dense US-event schedule. The currency pair is also trading within a broader consolidated range, between the 0.6850 and 0.7275 price areas. So the short-to-medium term picture is mixed, while the long term bullish market structure, since the April 2025 lows remains intact. Volatility around US inflation and the FOMC may be significant, so traders should be prepared for both scenarios.