The Australian Dollar (AUD) is trading close to the 0.7100 level against the US Dollar (USD), maintaining its position near multi-week highs following a steady climb from earlier lows. Although the AUD/USD pair is marginally weaker on the day due to a slight recovery in the USD, the broader uptrend for the Aussie remains intact [1].
Recent Australian employment data has shown weakness, indicating that the labor market is cooling faster than previously expected after a period of resilience. At the same time, inflation expectations in Australia have increased, creating a mixed outlook for the economy. This combination of softer jobs numbers and rising inflation expectations has complicated the Reserve Bank of Australia's (RBA) policy outlook. The RBA held its cash rate at 4.35% during its August meeting and warned that it could raise rates if upside inflation risks materialize, maintaining a hawkish bias that has helped support the AUD near its highs [1].
Technical analysis reveals that AUD/USD is trading at 0.7115, showing a modest bullish bias as it remains above both the 20-period Simple Moving Average (SMA) at 0.7104 and the 100-period SMA at 0.7053. Horizontal support at 0.7103 further reinforces this constructive stance, while the Relative Strength Index (RSI) at around 58 suggests mildly positive momentum without reaching overbought territory. Resistance levels are noted at 0.7120, 0.7124, and 0.7132, where buying pressure may begin to fade. On the downside, support is found at the 20-period SMA (0.7104), horizontal floor (0.7103), and the 100-period SMA (0.7053) [1].
Looking ahead, market participants are focusing on Friday's US flash Purchasing Managers' Index (PMI) figures, which are considered the most important domestic release remaining this week. Previous PMI readings have been comfortably in expansion, and traders will be watching to see if this momentum continues [1].
CONCLUSION
The Australian Dollar remains supported near multi-week highs as mixed economic data keeps the RBA's tightening bias alive. While weaker employment figures argue for patience, persistent inflation expectations maintain the possibility of further rate hikes. Market attention now turns to upcoming US PMI data, which could influence near-term AUD/USD direction.