AUD/USD Market Analysis: Bulls Test 0.7100 Barrier
BY Eleni Antoniou
|August 14, 2026AUD/USD is trading near 0.7070 on 14 August 2026 after a slight recovery from June’s short-term weakness. The Australian dollar is being supported by a wide policy-rate advantage and improving price structure, but resistance around 0.7100 and a busy Australian economic data calendar keep the outlook balanced.
AUD/USD market overview
That recent July advance has not yet produced a decisive breakout. Price is consolidating below the first meaningful resistance zone at 0.7100, while trading within the broader May-to-June. The immediate trading outlook therefore depends on whether buyers can preserve the higher-high, higher-low structure.
The macro backdrop is also finely balanced. Australia's policy rate remains above the US federal funds range, which can support the Australian dollar through relative yield. However, softer Australian inflation has reduced the urgency for another RBA increase, while the Federal Reserve has not declared victory over US inflation.
Latest AUD/USD market news
The Reserve Bank of Australia left the cash rate unchanged at 4.35% on 11 August. That followed three increases earlier in 2026 and gave policymakers more time to assess the effect of tighter financial conditions. The hold was consistent with softer-than-feared June-quarter inflation: headline CPI rose 0.6% quarter on quarter, while annual headline inflation eased to 4.0%. Trimmed mean inflation rose 0.8% over the quarter and 3.6% over the year, slightly below market and RBA forecasts but still above the 2-3% target.
The Federal Reserve held its target range at 3.50-3.75% on 29 July. Its statement described economic activity as expanding at a solid pace and inflation as elevated. Three policymakers dissented in favor of a 25-basis-point increase, a reminder that renewed US price pressure could quickly support the dollar.
The latest US inflation releases were less threatening. July CPI rose 0.1% month on month and 3.4% year on year, down from 3.5% in June. July producer prices were unchanged on the month, and annual PPI slowed to 4.7% from 5.5%. These reports lowered immediate pressure for a September Fed hike and helped limit US-dollar demand, although energy and tariff-related price risks remain.
AUD/USD technical analysis
The daily chart shows a constructive short-term recovery inside a broader range. AUD/USD rebounded from the 0.6850 area in late June, reclaimed 0.7025, and maintains a sequence of higher-highs and higher-lows since the beginning of July. The pair has since attempted to test 0.7100.
Momentum is positive, holding above 0.7025 and the 50-day moving average, would help preserve the higher-low structure. The bullish structure becomes more credible if price can continue to convert former resistance into support. A break below 0.7025, then 0.6925 could potentially put Marches lows into focus, and potentially change the short-to-medium term price structure.
AUD/USD potential bullish scenario
A bullish scenario may gain support if AUD/USD holds above 0.7025 and closes decisively above 0.7100. Strong Australian wage or labour data, stable risk sentiment, and further evidence that US inflation is cooling would reinforce that move.
Under those conditions, 0.7175 could become the first upside objective. A clean break and successful retest of that zone could open a re-test of the yearly high at 0.7275. The bullish scenario could potentially lose momentum on a return below 0.7025 and the 50-day moving average.
AUD/USD potential bearish scenario
A bearish scenario may develop if 0.7100 continues to cap rallies and price reverts back to the 50-day moving average. Softer Australian wages or employment, weaker Chinese growth signals, renewed geopolitical stress, or stronger US inflation expectations could strengthen demand for the US dollar.
A break below the 50-day moving average, currently around 0.9690 could potentially expose 0.6925, followed by the 0.6850 swing low area. While price remains above the 50-day moving average, the currency pair remains constructive.
Key AUD/USD levels and catalysts to watch
- Resistance: 0.7100, 0.7175, 0.7275.
- Support: 0.7025, 0.6925, 0.6850.
Catalysts
- 19 August: Australia Wage Price Index for the June quarter.
- 20 August: Australia Labour Force report for July.
- 25 August: Minutes of the RBA's August monetary policy meeting.
- 26 August: Australia's July CPI, followed later by US second-quarter GDP revisions and July personal income and outlays.
Conclusion
The AUD/USD has a cautiously constructive bullish price structure, while price holds above the 50-day moving average, but the pair still remains below significant resistance clusters. A break above 0.7100 would improve the AUD/USD price forecast toward the yearly highs. Failure at resistance followed by increased selling pressure below 0.7000 would shift attention back to the March and June lows.
The next one to two weeks are likely to be driven by the interaction between Australian wage and employment data, US inflation and activity expectations. Both scenarios remain possible.
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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.
