AUD AI Market Pulse, Wednesday, 28 October 2026
JAFX AI’s read of the news on AUD (Australian dollar), as it stood at the end of the day: read at 21:00 UTC.
Bias: bullish
AUD firm at a one-month high near 0.7054 after hot CPI and a USD dip post-Fed. A November RBA hike to 4.85% is ~78% priced. Price is pressing the 0.7050-0.7080 resistance zone.
September CPI ran hot: 4.3% y/y vs 4.2% f/c, and 0.8% m/m vs 0.7% f/c. Q3 trimmed mean rose 1.0% q/q, above the RBA's 0.8% projection. This lifted November hike odds to ~78% and sent AUD/USD to ~0.7055 in Asia before it faded toward 0.7030. The Fed then held at 3.75-4.00% with two officials favoring a hike. The USD softened despite Warsh's reaffirmed 2% target and comment that tightening is working, pushing AUD/USD up 0.52% to 0.7054, its highest since 23 Sep. AUD/NZD hit its highest since March 2013, near 1.2600, after the RBNZ's surprise hold, then pulled back toward 1.2520.
The past week
AUD outperformed G10 on hawkish RBA repricing and a recovery in risk/equities. It defended the March uptrend near 0.6900 and ground sideways around the 100-DMA before the CPI breakout. The USD was firm through the week on Fed hike bets (December hike odds ~82%) and geopolitical risk. That capped follow-through until the post-FOMC dip.
The bigger picture
This is a policy-divergence regime in AUD's favor: the RBA is in a renewed tightening cycle (Standard Chartered sees 4.85% in Q4 and no cut until Q3 2027) while the RBNZ pauses. The Fed is on hold with a hawkish lean, and the BoC has also resumed hiking. Global tightening limits how much AUD gains purely from rate differentials versus the USD.
Positioning
A 3 Nov hike to 4.85% is mostly priced (~78%), along with another move in Q1. A plain hike adds little fuel, while a hold or a 'one-and-done' signal carries the bigger repricing risk. Upside now needs a hawkish RBA tone or USD weakness to clear the 0.7050-0.7080 moving-average cap.
Scenarios it set out
- RBA hikes to 4.85% (f/c) with hawkish guidance or an open door to Q1 AUD extends; AUD/USD tests the 0.7060/0.7070 resistance and the 0.7080 top of the 50/200-DMA confluence. A clean break opens the larger rebound SocGen flags.
- RBA hikes to 4.85% but signals it is done or data-dependent Sell-the-fact as the priced Q1 move is trimmed; AUD/USD slips back toward 0.7020 support. A break below 0.6995 negates UOB's 0.7070 view.
- RBA holds at 4.60% (~22% implied) Sharp AUD downside repricing; AUD/USD toward 0.6950 support and possibly the 0.6900 March trendline. AUD/NZD unwinds from its overbought highs toward 1.2490.
What it said to watch
- Whether AUD/USD can close above the 200-DMA / 0.7050-0.7080 zone, which BBH says it has so far failed to clear.
- 0.7020 then 0.6995 as near-term support; losing 0.6995 undermines the upside setup per UOB.
- RBA November hike pricing (~78%) and the priced Q1 move into 3 Nov; any Bullock pushback.
- USD follow-through after the FOMC: whether December Fed hike odds (~82%) hold or fade, given two officials favored a hike.
- AUD/NZD near 1.2520 after the 13-year high near 1.2600; overbought, with support around 1.2490.
- Risk sentiment and equities (AI-spending concerns), and AUD/JPY near 111.30 as a risk barometer.
Risk ahead, as it saw it
Australia PPI, Fri 30 Oct 00:30 UTC (no forecast). Main event: RBA rate decision, statement and SoMP, Tue 3 Nov 03:30 UTC (f/c hike to 4.85%), with the press conference at 04:30 UTC. Australia S&P Global PMIs follow on 3 Nov 22:00 UTC (Composite f/c 47.7, Services f/c 47.8).