AUD/USD Price Forecast: Focus Turns to Fed Policy as Pair Consolidates Above 20-day EMA

Broad Australian currency strength lifts AUD/USD towards 0.7020.
Wednesday’s Australian Q3 CPI release and Fed policy decision are firmly in investors’ focus.
Expectations point to the Fed retaining interest rates within the 3.75%-4.00% band.

Broad outperformance by the Australian Dollar (AUD), with the New Zealand Dollar (NZD) the exception, supports a modest rise in AUD/USD on Tuesday. During the European session, the Australian Dollar trades slightly firmer against the US Dollar (USD), at around 0.7020.

How Is The Australian Dollar Performing Today?

The Australian Dollar recorded its strongest performance against the Euro today. Its percentage moves against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.19%	0.17%	0.16%	0.04%	-0.09%	-0.17%	0.08%
EUR	-0.19%		-0.01%	0.02%	-0.14%	-0.27%	-0.37%	-0.09%
GBP	-0.17%	0.01%		0.02%	-0.12%	-0.26%	-0.33%	-0.07%
JPY	-0.16%	-0.02%	-0.02%		-0.13%	-0.27%	-0.35%	-0.10%
CAD	-0.04%	0.14%	0.12%	0.13%		-0.14%	-0.22%	0.05%
AUD	0.09%	0.27%	0.26%	0.27%	0.14%		-0.08%	0.19%
NZD	0.17%	0.37%	0.33%	0.35%	0.22%	0.08%		0.28%
CHF	-0.08%	0.09%	0.07%	0.10%	-0.05%	-0.19%	-0.28%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the Australian Dollar on the left and following its row across to the US Dollar, for instance, gives the percentage change for AUD (base)/USD (quote) in the corresponding cell.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Despite the uptick, AUD/USD is expected to trade flat while financial markets wait for Wednesday’s monetary policy decision from the Federal Reserve (Fed).

Will the Fed hold steady as RBC points to gradual tightening into 2027?

An unchanged policy setting at this week’s meeting is the expectation of analysts at Royal Bank of Canada, who say the “Federal Reserve … expected to hold the fed funds target range unchanged on Wednesday after hiking for the first time since 2023 in September.” September’s increase signalled a return to tightening. On the pace of subsequent moves, however, RBC observes that “FOMC members continue to signal that more hikes will follow, but comments after the last decision suggest a gradual approach.” The bank maintains its projected rate path, stating that “we expect two 25-basis-point rate hikes ahead before the end of Q1 2027.”

Also drawing investor attention this week are Thursday’s Q3 Gross Domestic Product (GDP) figures and September Personal Consumption Expenditure (PCE) Price Index data. Q3 results from hyperscalers, including Amazon, Alphabet and Microsoft, will be closely watched as well.

For Australia, Wednesday’s Q3 Consumer Price Index (CPI) release is the focus. Inflationary pressures are expected to have accelerated to 1.3%, compared with the previous reading of 0.6%.

AUD/USD Technical Analysis: Can The Pair Extend Its Recovery?

A slightly bullish near-term outlook persists for AUD/USD on the daily chart, where the pair trades at 0.7021. Holding just above the 9-period exponential moving average (EMA) of 0.7006 points to the early stages of a recovery following the recent pullback. At 51.5, the Relative Strength Index (RSI) is marginally above neutral, indicating modest upward momentum while remaining outside overbought territory.

Immediate downside support lies at the 9-period EMA of 0.7006, while the high of 26 October at 0.7040 presents the principal upside barrier. A break above 0.7040 would set the pair on a fresh upward leg.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Data Indicator

Quarterly Consumer Price Index: What Does The QoQ Reading Measure?

Published every quarter by the Australian Bureau of Statistics, the Consumer Price Index (CPI) tracks price changes in a fixed basket of goods and services purchased by households. Each quarterly CPI figure is derived from the average of the three corresponding monthly CPIs. Prices in the reference quarter are measured against those in the preceding quarter to produce the QoQ reading. A higher reading is regarded as bullish for the Australian Dollar (AUD); a lower one is regarded as bearish.

Explore further.

Upcoming release: Wed 28 Oct 2026 00:30

Release frequency: Every quarter

Consensus estimate: 1.3%

Prior reading: 0.6%

Data source: Australian Bureau of Statistics

Why does this matter for traders?

Markets and the AUD’s valuation are significantly influenced by the quarterly Consumer Price Index (CPI), released by the Australian Bureau of Statistics (ABS). To fulfil its inflation mandate, the Reserve Bank of Australia (RBA) closely monitors this measure, which carries substantial implications for monetary policy. Higher consumer prices generally support the AUD, as the RBA could raise interest rates to keep inflation at its target. Publication takes place nearly 25 days after the end of the quarter.