The RBA's February rate hike to 3.85%, the first in over two years, continues to underpin the Australian Dollar after this week's minutes flagged elevated inflation risks and left the door open for further tightening. Thursday's January employment data reinforced that stance, with the unemployment rate holding at 4.1% (below the expected 4.2%) and the number of unemployed falling for a fourth consecutive month.
On the US Dollar side, the Federal Open Market Committee (FOMC) minutes released Wednesday struck a hawkish tone, with members describing disinflation as potentially "slower and more uneven" than expected and some participants flagging that upward rate adjustments could not be ruled out. Markets now price a 94% chance the Fed holds in March. Friday's US Q4 GDP and core PCE will be critical in shaping rate expectations into the second quarter.
Consolidation below 0.7147 as Stochastic eases from overbought
On the daily chart, AUD/USD traded in a narrow range near 0.7050 on Thursday. The pair is holding above the rising 50-day EMA at 0.6865 and well above the 200-day EMA at 0.6625, confirming the uptrend from the January lows near 0.6664 is continuing. Since printing a year-to-date high at 0.7147 in early February, price has consolidated in a roughly 0.7000 to 0.7100 band, with the 0.7000 psychological level acting as a floor.
The Stochastic Oscillator has crossed bearish from the overbought zone and is now easing toward neutral territory, suggesting the rally is pausing rather than reversing. Several small-bodied candles and doji near 0.7050 point to indecision ahead of Friday's US data. Resistance sits at the 0.7147 high; a break above would target 0.7200. Support rests at 0.7000, followed by 0.6900 and the 50-day EMA at 0.6865.
AUD/USD daily chart
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