AUD/USD Market Analysis - Pivot Point
BY Eleni Antoniou
|September 18, 2026AUD/USD is trading near 0.7125 after retreating from the 0.7239 early September highs. For the next one to two weeks, the pair faces a tug-of-war between still-restrictive Australian policy settings and a newly firmer US dollar following the Federal Reserve's September rate increase.
AUD/USD Market overview
AUD/USD has shifted from a late August recovery into a corrective phase. The pair rose from an intraday low near 0.6850 on 30 June to 0.7239 on 9 September, a gain of 389 pips. However, it then lost momentum and fell to 0.7074 on 16 September before stabilising around 0.7125 at the time of writing. That sequence leaves the short term picture cautious, as the market is holding just below a pivot area, while also showing that the 50-day moving average around 0.7085 provided support.
Latest market news for AUD/USD
The Federal Reserve raised the federal funds interest rate by 24 basis points on 16 September, citing solid activity, resilient spending and elevated inflation. The unanimous decision strengthened the case for near-term US-dollar support, particularly after the pair failed near its September high.
In Australia, the Reserve Bank of Australia left the cash rate at 4.35% at its August meeting and said inflation remained too high, with a return to the middle of its 2% to 3% target range not expected until early 2028. July CPI was 3.5% year on year, while trimmed mean inflation was 3.6%. Those figures preserve a relatively hawkish Australian policy backdrop, but they do not remove the risk that global US-dollar demand dominates the next move.
AUD/USD technical analysis
The 0.7125 area is the first meaningful short term resistance area because it acted as a break and retest area. A sustained break through it would reopen 0.7200 and the recent highs at 0.7237. On the downside, the 50-day moving average is the first dynamic support zone, followed by the 0.7025 pivot area. A rejection of 0.7125 and a clear push below the 50-day moving average could weaken the current structure.
Fundamental and macro drivers
Australia's 4.35% cash rate is restrictive, and the RBA has emphasised that inflation is still above target. However, the Fed's latest interest rate hike makes the US side of the pair more supportive for the dollar than it was earlier in the month. The immediate question is whether the next data validate that policy contrast or cause markets to reassess it.
Australian data will matter most through the inflation and labour channels. The Australian Bureau of Statistics is scheduled to release August labour-force data on 24 September and August CPI on 30 September. For the United States, the August Personal Income and Outlays report, including the PCE price measures, is due on 30 September. These releases may materially change rate expectations on either side of AUD/USD.
Bullish scenario for AUD/USD
A bullish scenario may gain support if AUD/USD continues to hold above the 50-day moving average and pushes through 0.7125. That would suggest that the post-Fed slide is being absorbed rather than extending. Stronger-than-expected Australian labour or inflation data, or any easing in US dollar demand after the Fed decision, could reinforce this path. Above 0.7125, traders may watch 0.7200 as the next price magnet, then to potentially give way for the pair to return to its May 2026 highs.
Bearish scenario for AUD/USD
A bearish scenario may gain support if the pair gets rejected at 0.7125 and breaks below the 50-day moving average. A push below the 50-day moving average cold become a technical signal that the rebound structure is losing momentum. In this case, price discovery could move lower with 0.7025 as the first significant support area.
Key levels and catalysts to watch
- Resistance: 0.7125, 0.7200, then 0.7275
- Support: 50-day moving average, 0.7025, then 0.6925
Catalysts
- 24 September: Australian August labour-force report.
- 30 September: Australian August CPI.
- 30 September: US August Personal Income and Outlays, including PCE inflation.
Conclusion
AUD/USD enters the next one to two weeks in a fragile but still defined price range. The bullish case may continue if price remains above the 50-day moving average, and a break through 0.7125. The bearish case could gain credibility if price trades below the 50-day moving average and gains momentum towards the 0.7025 support area. With Australian labour data and Australian CPI arriving alongside US PCE data, volatility may increase around the end of September.
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Authors BIO
Eleni is a financial markets enthusiast contributing to content covering forex, indices, commodities, and global market developments. She is passionate about researching market-related topics and helping make financial information more accessible to traders.
