What is driving the move

The main focus this week has been the broad selling of the US dollar, triggered by a US Treasury announcement that increased pressure on the USD across G10. According to ForexLive, this was precisely what provided the catalyst for the latest leg higher in AUD/USD after the pair had ground sideways for most of the week.

Risk-on sentiment is broadly based. Commodity markets — where Australia is one of the world's largest exporters — are joining in forcefully: gold and silver are both sharply higher on Friday, and iron ore prices, a key indicator of Australian export revenue, held near $120 per tonne in August (according to research). A strong commodity-driven export balance is structurally positive for the AUD and provides the currency with fundamental tailwinds beyond pure speculation.

Bitcoin is up 6.45% on the day and around 23% for the week, further signalling that market participants are willing to take on risk. Historically, AUD/USD has shown short-term correlations with risk-on currency pairs such as AUD/JPY during periods when crypto moves sharply, as both are exposed to global appetite for risk assets. This is not a causal relationship, but a shared symptom of the market pricing in lower risk aversion.

From a macro perspective, the Reserve Bank of Australia (RBA) remains a factor in the background — strong employment data and persistent inflation have kept the market open to further rate hikes, providing the AUD with fundamental support against a Fed that appears more cautious. DXY weakness amplifies the effect: when the dollar is sold broadly, it is currencies with commodity and growth exposure like the AUD that typically lead the advance.

The dollar selling following the Treasury announcement was the catalyst — but it is commodities and risk-on sentiment that are keeping the AUD in the driving seat.

Key figures

0.7178
AUD/USD intraday high
+0.86%
Daily change
0.7200
Next technical resistance
0.7070
Weekly low / 50% retracement
AUD/USD surges to highest since June — up 0.86% to 0.7178 as dollar struggles - Bilde 1

Currency overview — G10 and cross rates

The AUD is clearly the strongest of the major currencies against the USD today. EUR/USD and GBP/USD are also recovering somewhat in line with broad dollar weakness, but neither matches the AUD's relative strength on Friday.

AUD/JPY is following suit and reflects the same risk-on theme that is pushing the yen lower: during periods of strong global risk appetite — illustrated by this week's crypto rally and commodity gains — AUD/JPY is a classic barometer. NZD/USD is moving in the slipstream of the AUD and is also stronger, but underperforming its Australian counterpart given Australia's heavier commodity export profile.

Emerging market currencies with commodity exposure, such as the South African rand (ZAR) and the Canadian dollar (CAD), are also stronger today — a pattern that confirms it is broad dollar selling combined with commodity bids, rather than Australia-specific news, that is the story.

Worth noting: the NOK is not the big winner today despite rising oil prices, suggesting that the AUD's advance is partly driven by China-exposure optimism (iron ore) and the specific dollar selling, rather than a pure energy commodity effect.

AUD/USD surges to highest since June — up 0.86% to 0.7178 as dollar struggles - Bilde 2

Technical picture

The technical setup in AUD/USD is constructive following this week's test and rejection of the 50% retracement level at 0.7070 from the May–June decline (ForexLive). The fact that the pair failed to break below the 100-day moving average — which was nearby — and quickly reversed is a classic bullish reversal signal.

The pair has now broken clearly above the 61.8% retracement at 0.71193, which now acts as primary support. The early weekly highs around 0.71317 serve as a secondary support zone. As long as the pair holds above 0.71193–0.71317, buyers are in control.

AUD/USD is now testing swing resistance at 0.71993–0.7200 — a break above this level opens the path toward 0.7250+

The RSI on the daily timeframe is approaching overbought levels following the strong weekly rally, which may temper momentum at the resistance zone. The volume profile shows relatively thin technical terrain between 0.7200 and 0.7250 if resistance is broken, but a push toward 0.7300 appears ambitious for now without a fresh fundamental catalyst.

On the downside: a break below 0.71193 would weaken the bullish picture and likely invite a retest of the 0.71317 zone. Below that, 0.7070 is the decisive floor.

What to watch

Upcoming data and events:

  • RBA meeting minutes and speech calendar — any signals regarding further rate hikes will provide the AUD with direct support
  • US PCE inflation and labour market data — a stronger-than-expected reading could restore USD strength and push AUD back below 0.7131
  • Chinese PMI figures — Australia's export fortunes are closely tied to Chinese industrial and property demand; weak Chinese data is the fastest way to derail the AUD rally
  • Iron ore prices — keep an eye on spot prices near $120/tonne; a drop toward $110 would increase pressure on the AUD
  • FOMC signals from Jackson Hole (if relevant next week) — any shift in the Fed's "higher for longer" rhetoric will move the DXY and therefore AUD/USD

Price levels to watch:

  • 0.7200 — key resistance, swing zone. A break and daily close above this level is bullish confirmation
  • 0.71193–0.71317 — primary support cluster. If the pair loses this area intraday, the risk of a retest of 0.7070 increases
  • 0.7070 — weekly low and 50% retracement. Below this level, the technical picture shifts fundamentally to bearish