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Published: 26 August 2026,10:51
Daily Market Analysis New
Key Takeaways:
*The Australian dollar strengthened after the RBA minutes showed that several policymakers considered a rate hike and remained concerned about upside inflation risks.
*Today’s PCE inflation data is the key near-term catalyst. A softer reading could weaken the U.S. dollar and support AUD/USD, while a hotter print could revive Fed tightening expectations and cap AUD gains.
*Fed Chair Kevin Warsh’s speech later this week could reshape global rate expectations. For now, the AUD outlook has improved, but its gains remain sensitive to U.S. yields and Fed guidance.
The Australian dollar has drawn fresh support following the release of the Reserve Bank of Australia’s August meeting minutes, which carried a distinctly hawkish undertone. While the Board ultimately held the cash rate steady at 4.35 per cent, the minutes revealed that several members had actively considered a rate increase and viewed upside risks to the inflation outlook as material. Concerns centred on the potential for prolonged energy-price pressures from the Middle East conflict, stronger-than-expected demand related to artificial intelligence investment, and the risk that high inflation could become more entrenched. This language reinforced the message that further tightening remains a live option if incoming data disappoint, helping to underpin the Aussie against a backdrop of earlier policy caution.
In the near term, the currency’s direction will be heavily influenced by two major U.S. catalysts. Today’s Personal Consumption Expenditures (PCE) price index—the Federal Reserve’s preferred inflation gauge—will provide a critical reading on American price pressures. A softer-than-expected print could reinforce expectations of a prolonged Fed pause, weighing on the U.S. dollar and offering the Australian dollar additional upside. Conversely, a hotter reading would likely revive speculation of tighter U.S. policy, strengthening the greenback and capping gains in AUD/USD. Later this week, attention turns to the Jackson Hole Economic Symposium, where Federal Reserve Chair Kevin Warsh’s keynote address is widely anticipated. Any signal regarding the Fed’s reaction function or the path of interest rates could shift global yield differentials and risk sentiment, with direct implications for the Aussie.
Overall, the hawkish tilt in the RBA minutes has restored some policy support for the Australian dollar and left markets more alert to the possibility of further domestic tightening later in the year. However, the immediate path remains highly sensitive to U.S. inflation data and the messaging from Jackson Hole. Traders will be watching closely for confirmation that the relative yield advantage and risk-sensitive nature of the Aussie can be sustained in the face of evolving Federal Reserve expectations.
Technical Analysis
The AUD/USD pair continues to trade within a bullish structure, with the latest price action pushing the pair to a new high since early June. This move further reinforces the strength of the current uptrend and suggests that buying pressure remains firmly in control.
The bullish structure was established after AUD/USD successfully broke above the key psychological level at 0.7000, which marked an important technical breakout and provided the foundation for the subsequent rally.
With the pair now trading at its highest level since early June, the latest price action suggests that the bullish momentum remains intact. As long as AUD/USD continues to maintain its higher-high and higher-low structure, the pair could extend its current bullish trajectory and explore higher levels.
Resistance Levels: 0.7266, 0.7387
Support Levels: 0.7130, 0.6982
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