Over the past 24 to 48 hours, the AUD/USD pair has demonstrated strong performance, hitting a new annual high by trading above the 0.6717 level during December’s year-end session, slightly up from yesterday’s close at 0.67141. This rally was primarily driven by growing optimism around a potential Reserve Bank of Australia (RBA) rate hike in 2026, supported further by rising commodity prices bolstering the Australian dollar.

Market liquidity was thin during the year-end trading period as investors kept a close eye on Japan’s Consumer Price Index (CPI) and the US employment report, with the US dollar hovering near 12-week lows, indirectly benefiting the AUD. Despite disappointing economic data from China putting some pressure on the Australian currency, positive overall risk sentiment helped AUD/USD remain near its yearly high.

For the average investor, this recent strength in the Australian dollar reflects increased confidence in Australia’s economic recovery and expectations of monetary policy tightening. Driven by elevated resource prices and anticipated rate hikes, investors or traders holding AUD assets could see gains, which explains the sustained buying interest in the currency pair heading into the new year.

Daily Chart

The daily chart reveals a steady uptrend with AUDUSD consistently holding above its 50-day and 200-day moving averages, which act as solid support levels. The Bollinger Bands are widening upwards, indicating increased volatility and bullish momentum. The MACD remains above the zero line with the fast line over the slow line, signaling continued buying pressure. Overall, the chart indicates the persistence of a strong bullish trend for the longer term.

1H Chart

On the hourly chart, AUDUSD has been trending upwards in a stepped manner over the past 3-5 days, fluctuating between 0.6630 and 0.6720. Short-term moving averages are aligned bullishly, and the MACD has recently formed a golden cross, suggesting strengthening momentum in the short term. The slightly widening Bollinger Bands and increased volume support the notion of bullish buildup, increasing the probability of a breakout.

Technical Trend:  The current trend direction is decisively bullish, with price firmly above moving averages and momentum indicators supporting continued upward movement.

Technically, the AUDUSD bullish structure remains intact with rising MACD and short-term golden cross reinforcing buying confidence. The daily Bollinger Bands expansion and moving average support coupled with the recent annual high breakout suggest sustained upside potential. Traders should watch closely for a break above the 0.6728 yearly high to trigger further upward momentum.

Today’s economic calendar presents no significant or direct events impacting AUDUSD, with retail sales and trade balance data from Sweden and US pending home sales scheduled but unlikely to move the Australian dollar specifically. Market volatility is expected to be limited today, with traders advised to monitor any emerging market news.

Resistance & Support

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