AUD/USD Forecast: Consolidates near 0.7200 as bullish bias persists

The AUD/USD pair holds steady around the 0.7200 mark at the start of a new week and remains close to its highest level since mid-May, touched on Friday.

The Australian Dollar (AUD) continues to be underpinned by rising bets for a rate hike by the Reserve Bank of Australia (RBA) in September, bolstered by stronger-than-expected economic growth and persistent domestic inflation. The US Dollar (USD), on the other hand, struggles to capitalize on the upbeat US Nonfarm Payrolls (NFP)-led gains as traders opt to wait for the release of the US inflation figures later this week. However, escalating US-Iran tensions act as a tailwind for the Greenback, capping the upside for the AUD/USD pair.

Spot prices have now found acceptance above the 78.6% Fibonacci retracement level of the May-June downfall. This comes on top of the recent strong move up from the vicinity of the 200-day Simple Moving Average (SMA) and suggests that the path of least resistance for the AUD/USD pair remains to the upside. Moreover, a firm Relative Strength Index (RSI) around 66 and a mildly positive Moving Average Convergence Divergence (MACD) histogram suggest buyers retain control, though conditions are edging toward overbought.

Meanwhile, a multi-year peak, at 0.7272, is the next notable resistance, and a daily close above this hurdle would open the way for further gains. On the downside, initial support is seen at the 78.6% Fibo. retracement at 0.7186, which, if broken, would signal fading upside momentum. The AUD/USD pair might then decline to the 61.8% level at 0.7118 and the 50% retracement near 0.7070, with deeper cushions at 0.7023 and the rising 200-day SMA at 0.6989.

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 30 days. Australian Dollar was the strongest against the New Zealand Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).