AUD/USD Forecast: Break Above 0.7230 Targets 0.7400

According to the Australian Bureau of Statistics, household spending rose by 1.1% in July after gains of 1.0% in June and 1.2% in May. Annual growth accelerated to 7.0%, the strongest result since June 2023, led by recreation, food, hospitality and healthcare.

Nominal fuel spending increased by 2.2% after excise duty rose by 16 cents per litre. However, experimental volume data showed a 4.7% decline, suggesting that the nominal increase largely reflected higher prices rather than stronger demand.

The figures strengthened expectations of further RBA tightening. Markets now assign approximately a 47% probability to a September increase and fully price another move by December. The changing policy outlook was also examined in our previous AUD/USD forecast.

The US Dollar Index remains near 99.18 as investors await Fed Chair Kevin Warsh’s first Jackson Hole address. Recent comments from Federal Reserve officials have focused on persistent inflation, leaving the probability of a September rate increase near 35%. Similar pressure from US rate expectations has recently influenced EUR/USD following the latest PCE report.

Support and Resistance Levels

On the daily chart, AUD/USD is approaching the upper boundary of a broad ascending channel with dynamic limits around 0.7320–0.6950.

Technical indicators are turning bullish. The faster moving averages of the Alligator indicator are pointing higher, although they have not yet moved decisively away from the slower line. The Awesome Oscillator has formed fresh bars in positive territory.

Support levels: 0.7150, 0.7000.

Resistance levels: 0.7230, 0.7400.

AUD/USD Trading Scenarios and Forecast

Long positions may be considered after a confirmed break above 0.7230, with a target at 0.7400 and a stop-loss at 0.7100. Time horizon: seven days or more.

Short positions may be considered after a confirmed break below 0.7150, with a target at 0.7000 and a stop-loss at 0.7250.