Top Regulated Brokers
The Aussie dollar (AUD/USD) consolidated in early trade on Tuesday, with traders watching to see if the pair can reestablish its longer-term term uptrend following a minor retracement. The AUD/USD’s recent price action indicates caution ahead of several key U.S. economic reports scheduled for release on Wednesday and a highly anticipated speech Friday by Federal Reserve Chair Kevin Warsh at a Jackson Hole gathering.
Price Inflation Data, Jackson Hole Event to Influence AUD/USD’s Next Move
While rising bond yields and news of the Treasury Department doubling its buyback program has helped push the Aussie dollar to recent multi-month highs on dollar weakness, the pair took a breather on Monday following a report that the department could use the near $1 trillion General Account to help fund the buybacks instead of using short-term debt to finance the purchases. Meanwhile, the pair hardly flinched Tuesday following the Reserve Bank of Australia (RBA) publishing its Meeting Minutes, with the release shedding no new insights about the direction of domestic interest rates, which markets widely expect to remain on hold at 4.35% through the remainder of this year.
Looking ahead, traders will turn their attention on Wednesday to a slew of U.S. economic data releases, including consumer confidence, new homes sales, personal consumption expenditure, and second quarter economic growth. However, the pair’s next major move could come later in the week when Fed Chair Kevin Warsh delivers his first address at the Jackson Hole Economic Policy Symposium. The closely watched event has driven Greenback volatility in the past, and that trend could continue this year if Warsh provides guidance on the direction of U.S. interest rates or issues updates on the expansion of the Treasury buyback program.
AUD/USD Price Action Favors the Bulls
Over the past week, the AUD/USD has trended higher within a rising wedge, with the price tagging the pattern’s upper and lower trendline on several occasions to establish key support and resistance. More recently, the pair attracted buying interest near the pattern’s lower trendline but found selling pressure near the respected 50 moving average in early trade on Tuesday to suggest near-term apprehension.
Important Overhead Areas to Monitor
The first overhead area worth tracking sits around 0.7180. Traders who have initiated long positions on the recent pullback to the rising wedge pattern’s lower trendline could look to lock in profits in this location near last week’s prominent swing high, which also marks the pair’s highest trading level since early June.
To project a bullish target above last week’s high, traders can use TradingView’s bar pattern tool. When applying the analysis, we take the price bars comprising the first move higher from the rising wedge’s lower trendline and overlay them from the current advance higher near the pattern’s lower trendline. This forecasts a target of around 0.7205 and the completion of a basic Elliot Wave 1,2,3,4,5 pattern.
Key Support Levels Worth Watching
During retracements, it’s worth watching the 0.7130 level. This area, which finds support from several notable peaks that formed earlier this month, could come into play if the pair stages a decisive break below the rising wedge pattern’s lower trendline.
Selling below this level opens the door for a steeper decline toward 0.7110. This area on the chart could attract buying interest because it encounters a confluence of support from the nearby rising 200 moving average and a trendline that connects a series of peaks and troughs stretching back to the start of the rising wedge pattern.
AUD/USD Price Chart
The Consensus Trap: Why a Fed Rate-Cut Pivot Could Flip This Rally
AUD/USD bullish positioning currently assumes two things remain constant: U.S. economic data stays soft and the Fed maintains a dovish stance through year-end. Yet this consensus masks a vulnerability that retail traders often overlook. A single Jackson Hole remark from Vice Chairman Warsh signaling rate-cut delays or Fed patience with inflation could instantly reverse the dollar-weakness thesis. Similarly, if Wednesday's PCE print arrives above expectations — particularly a m/m read above 0.3%—institutional money would likely rotate out of AUD/USD longs into safe-haven dollars, catching unprepared longs flat-footed. The real risk is not that this rally ends, but that it ends violently and suddenly, triggered by a data point or Fed comment that shifts sentiment from dovish to hawkish in 24 hours. Traders holding extended positions should respect the asymmetry: one hawkish signal costs them weeks of gains.
What Would Break the Bullish Case
The AUD/USD bullish thesis has clear invalidation thresholds that traders must monitor with precision. First, a decisive daily close below the rising wedge's lower trendline at 0.7110 would signal structural failure; should the pair clear this level, a retest of 0.7085 becomes highly probable, opening the door to a deeper pullback toward 0.7050. Second, any Fed communication this week that hints at holding rates longer or pausing cuts would immediately pressure the pair, as the entire rally depends on U.S. rate-cut expectations. Third, and most tactically, if Wednesday's PCE headline print exceeds 0.3% month-over-month or the core rate prints above 0.2%, inflation fears could trigger an aggressive dollar rebound that invalidates the low-rate-environment thesis. Traders should set stops at 0.7105 to protect against a false wedge break, and monitor the 08:30 ET PCE release for the first critical data shock of the week
Recent price action supports further bullish momentum on the AUD/USD chart, though hotter-than-expected U.S. economic data and/or clarity about the Fed’s direction of interest rates and boosted Treasury buyback program could underpin the Greenback and subsequently pause the Aussie dollar’s longer-term uptrend.
Sources:
https://www.cnbc.com/2026/08/24/bessent-1-trillion-treasury-general-account-bond-buybacks.html
Ready to trade our analysis of the AUD/USD? Here is our list of the best Forex brokers worth reviewing.