In few instances do currencies respond to unexpectedly high inflation reports as quickly as the Australian dollar does, and this past week provided a major shock. Australian CPI jumped to 4.3% in September , leaving the Reserve Bank’s 3 November meeting looking like a hike waiting to happen. Let us examine the chart below and identify where buyers and sellers will be fighting for control prior to the headline reporting starting to drive prices.
Figure 1: AUD/USD key-level map in Australia’s green and gold, built from published closes and levels (illustrative, not a live feed).
Reading the Chart
Start on the left. AUD/USD traded at 0.7086 on 23 September, when weak PMI data met a hawkish Fed, as our AUD/USD forecast explained. The rate subsequently fell to 0.7021 on October 27th and closed around 0.7031 on October 28th, with a high of 0.7053. The yellow area represents the conflict zone: the 100-day simple moving average (SMA) of 0.7033 lies above, while the 200-day SMA of 0.6990 lies below. This zone is defended by buyers; however, buyers have yet to break through the 50% Fibonacci retracement level of 0.7066.
As well as being aware of the shape, notice how price action has created lower highs since the 0.7200 level in September, while the recent low point of the trading range at 0.7005 has remained intact. This is one of the main reasons that traders pay attention to this level. A “pivot” can only help if you understand what will occur above and below it; therefore, continue reading.
Why the RBA Matters
Inflation is the story. After September’s hike in the cash rate (to 4.60%), the trimmed mean CPI rose to 3.7 percent annually. Deputy Governor Andrew Hauser called the outlook “materially worse” than expected and Governor Michele Bullock stated that inflation was “far too high.” as investingLive reported . Markets price roughly 90% odds of a November move, which CBA’s Belinda Allen called an “insurance hike”. The Fed’s hold, covered in our GBP/USD forecast , and December hike bets in our gold price update keep the dollar firm.
Levels That Decide the Move
Technically, the picture is balanced. DailyForex noted a double bottom and a 50-period average crossing above the 200-period, a golden cross, which favours dip buyers. Yet RoboForex’s weekly view stays bearish below 0.7034, targeting 0.6940, 0.6893 and 0.6844. Above, the 61.8% Fibonacci level at 0.7106 and the 2026 high at 0.7277 are bigger prizes. Our guide to support and resistance shows how to trade such zones.
Three Scenarios to Plan
Think in terms of probabilities, rather than making predictions. With approximately a 90% chance of a rate hike, most of the hawkishness expected from the RBA has already been reflected in prices. Therefore, the surprise would come in the form of cautious forward guidance. For investors, a stronger Australian Dollar will help lower imported inflation; conversely, a weaker Australian Dollar will increase imported inflation. As such, there is a connection between the RBA and this chart.
Bullish: a daily close above 0.7066 targets 0.7106, then 0.7277.
2. Bearish: a close below 0.6990 opens 0.6940 and 0.6893.
3. Neutral: chop between 0.7005 and 0.7055 until the RBA speaks.
In the short-term, watch out for price volatility related to events leading up to November 3rd. Keep an eye on the Monetary Policy Statement as a source of forward guidance. The Monetary Policy Statement is likely to have a greater impact on prices than the actual interest rate itself. For the long-term, the 0.6893 support level and the golden cross indicate that dips remain attractive buying opportunities as long as this support level holds.
See how Babypips frames the inflation shock too. So, will the RBA hike again, or is it priced in? And where would you stop sit if 0.6990 gives way?
Frequently Asked Questions
Will the RBA raise rates in November 2026?
The markets currently estimate there’s about a 90% chance that the Fed will raise rates by 25 basis points at their next meeting on November 3rd, based on the fact that CPI reached 4.3% in August. There is no certainty of this occurring prior to the official announcement.
What is the key support for AUD/USD now?
The 200-day moving average near 0.6990 is a major area of support, with 0.6940 and 0.6893 further down. The 100-day moving average at 0.7033 is the current short-term pivot.
Is AUD/USD bullish or bearish?
The bias is neutral. Both a Golden Cross and Double Bottom are positive for those looking to buy currency; however, the exchange rate is still below 0.7066 and RoboForex continues to be bearish on the market as long as it is below 0.7034.
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