Aussie eyes YTD high after channel breakout

The Australian Dollar (AUD) extends its advance against the US Dollar (USD) on Friday, with AUD/USD climbing to its highest level since September 18 as traders are almost certain the Reserve Bank of Australia (RBA) will leave interest rates unchanged on December 9.

At the time of writing, AUD/USD is trading around 0.6637, on track for a second straight weekly gain.

The fundamental backdrop remains supportive for the Aussie, with markets also beginning to factor in the possibility that the RBA could revisit tightening next year if domestic conditions stay firm.

This stands in sharp contrast to the Federal Reserve’s (Fed) dovish outlook, which continues to weigh on the US Dollar and further supports AUD/USD.

From a technical perspective, the daily chart shows a strong breakout above a descending parallel channel earlier this week, signalling a clear shift toward a bullish structure.

The move higher has also pushed AUD/USD above the 21-day, 50-day and 100-day Simple Moving Averages (SMAs), which are now clustered near the upper boundary of the former channel, creating a solid support confluence in the 0.6550-0.6520 region in the event of a pullback.

As long as prices hold above this zone, the broader bias is expected to remain in favor of the bulls, while a break below it would risk a deeper correction and weaken the near-term outlook.

On the upside, 0.6650 is acting as the immediate resistance. A decisive close above this area would open the door toward this year’s peak at 0.6707, marked on September 17, which also stands as the year-to-date high and the highest level since October 2024. Beyond that, the psychological 0.6800 mark becomes the next bullish target if momentum continues to build.

Momentum indicators reinforce the improving tone. The Relative Strength Index (RSI) is holding near 68, approaching overbought territory but still reflecting firm upward momentum. Meanwhile, the Average Directional Index (ADX) has climbed toward 19, signalling that trend strength is beginning to recover after a subdued period.

Economic Indicator

RBA Interest Rate Decision

The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.