Australian Dollar vs US Dollar edges higher as Morgan Stanley reaffirms bullish outlook

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Australian dollar rises 0.52% today

Highlights

Morgan Stanley projects Australian Dollar strength against the US Dollar, citing the Reserve Bank of Australia’s hawkish recent statements.
Further US Dollar weakness could depend on a dovish pivot at the upcoming Federal Open Market Committee meeting.
AUD/USD trades near the session high with bullish technical momentum, consolidation expected in the $0.7081 to $0.7166 range.

Conviction in AUD grows as RBA hawkishness shifts sentiment

Morgan Stanley updated its G10 currency scorecard, highlighting a positive outlook for the Australian Dollar versus the US Dollar. The firm noted strong conviction in favor of the Australian Dollar, attributing this to the Reserve Bank of Australia's recent hawkish commentary. The outlook also suggests that further US Dollar weakness could depend on a dovish pivot at the upcoming Federal Open Market Committee meeting.

Anton Kharitonov, expert at Traders Union, remains skeptical about the recent bullish momentum in AUD/USD. He notes that while Morgan Stanley’s endorsement and the hawkish RBA support sentiment, technical indicators show mixed signals — with CCI showing overbought and Stochastic RSI flashing sell. Kharitonov warns that divergence in oscillators could undermine the current uptrend if support at $0.7081 fails. He points out that upside scenarios rely heavily on a dovish turn from the Fed, which is uncertain. "Rallies above $0.7128 face exhaustion risk, and I would stay cautious until broader confirmation emerges."

Viktoras Karapetjanc, expert at Traders Union, sees a strong fundamental case for further gains in AUD/USD. He emphasizes the constructive impact of the Reserve Bank of Australia’s hawkish stance and Morgan Stanley’s high conviction outlook. Karapetjanc highlights the bullish structure as AUD/USD trades above all major moving averages, with further growth likely if the Federal Reserve adopts a dovish tone. He believes the market offers attractive opportunities as upward momentum prevails. "The bullish structure remains intact — I expect buyers to push towards the top of the forecast range in coming sessions."

Parshwa Turakhiya, analyst, believes short-term opportunities center around recent momentum and volatility in AUD/USD. He notes that technicals favor buyers with price action near session highs, yet overbought readings and mixed oscillators caution agility. Turakhiya sees sentiment buoyed by hawkish central bank signals, but expects most action within the $0.7081 to $0.7166 band. "With buyers in control but oscillators flashing caution, I’d watch for quick breakouts and reversals off key levels this week."

Sustained bullish momentum as moving averages and oscillators diverge

AUD/USD is trading above its 20-day, 50-day, and 200-day moving averages, located at $0.7044, $0.6987, and $0.703, respectively. This alignment supports bullish sentiment across short, medium, and long-term horizons, with the immediate resistance at $0.7128 and support at $0.7081. Technical momentum favors buyers: the MACD is positive, ADX indicates a neutral trend, and the RSI is near 59, showing positive momentum. The Stochastic RSI signals strong sell, and the CCI indicates the pair is overbought. Bull/Bear Power above zero affirms buyer dominance, while the Awesome Oscillator confirms upward momentum. Price action remains near session highs, with volatility at 0.86% and some divergence in select oscillators.

Earlier, analysts noted that heightened geopolitical tensions were influencing safe-haven flows and contributed to the recent consolidation in AUD/USD. The current outlook strengthens this view with new institutional bullish commentary and technical confirmation, highlighting $0.7128 as the key resistance level to monitor for a potential breakout.

Source of Data: AUD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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