AUD Tries to Break Above Key Resistance as RBA Hike Bets Revive

The Australian dollar is testing key resistance near 0.7180-0.7200 against the US dollar, as stronger-than-expected inflation data and resilient household spending have revived market expectations of another Reserve Bank of Australia (RBA) rate hike.

According to OCBC FX strategists Sim Moh Siong and Christopher Wong, the latest Australian Consumer Price Index (CPI) reading came in hotter than forecast, while household spending has shown unexpected resilience. These data points have led traders to reassess the RBA's policy trajectory, with some now pricing in a possible further hike.

A sustained move above 0.7180-0.7200 could determine the AUD/USD pair's near-term direction, potentially opening the door towards the next psychological barrier. However, a rejection at this level might trigger a pullback toward support levels.