AUDUSD weakens as markets brace for a pivotal week

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A fundamental overview of the AUD to prepare for a key week

This week is promised to be a major mover for the Forex market, and the AUD is far from being excluded from potential movement.

Between Central Bank meetings, including Wednesday’s FOMC and Australia’s Quarterly Inflation data, AUD Traders must stay prepared for the upcoming action.

The Royal Bank of Australia held its Main Rate at 3.85% at the beginning of July, citing higher inflation and more than decent employment figures. However, the week after, the figures were not as good.

The initial reaction was stronger for the AUD, but the motion is starting to show some change right after the pair hit some 8-month highs.

Some headwinds are in the longer-term outlook for the Currency pair. Australian funds are increasingly hedging their foreign investments (particularly with the US), which would typically increase fundamental demand for the currency.

This is already taking place, as evidenced by the consistent and stable uptrend formed after the Liberation Day troughs. But markets are forward-looking, and traders need to adapt fast.

The upcoming Wednesday FOMC meeting will be a major key to the pair's dynamics, with a focus on the FED's communication.

The RBA still has about 60 bps of cuts priced in for the rest of the year (with a cut largely priced in for the next meeting), and this pricing is subject to much change, particularly with the inflation data coming up. FYI, the upcoming RBA meeting will be taking place on August 12.

Read More: Dollar regains footing as long-term Reversal carves out a Bottom

AUDUSD Technical Analysis

AUDUSD Daily Chart

AUDUSD Daily Chart, July 28, 2025 – Source: TradingView

The Aussie had invalidated a double top formation as the US Dollar saw some newfound weakness in the first trading days of the past week, taking the pair to some 8-month highs (0.66250) – failed continuation downwards brought some strong buying in the pair (failed patterns tend to be good signs of strong reversals).

However, the action has reversed again as the Greenback saw a reversal higher after Wednesday trading and this has marked another, more concrete top in AUDUSD with the forming of a bearish divergence.

Daily momentum is neutral but now tilting downwards. With the 50-Day MA acting as immediate support (0.6510), sellers will want to get a stronger push to regain longer-term control of the action.

AUDUSD 4H Chart

AUDUSD 4H Chart, July 28, 2025 – Source: TradingView

Markets have retracted sharply from the last highs and actually passing below the tighter channel lower bound (dotted blue line).

This itself will be attracting some trend-reversal traders but the action has to break conclusively below the Immediate Pivot Zone (level detailed below) before the downwards reversal shows an even higher probability of continuation.

Nevertheless, a failure to continue the selling momentum will point to rangebound action due to the 3 tops and 2 bottoms formed through the past two weeks of trading.

Levels to place on your charts:

Support Levels:

• Immediate Pivot Zone (0.65150 to 0.65350) - above + bullish, below + bearish
• 0.6485 mini support
• 0.6450 intermediate lows
• 0.63 to 0.64 Main Daily Support

Resistance Levels:

• Swing Resistance 0.6570 to 0.6590
• Wednesday Highs 0.66250
• Daily resistance 0.6670 to 0.6740 and high of upwards Channel

AUDUSD 1H Chart

AUDUSD 1H Chart, July 28, 2025 – Source: TradingView

The week has started with some steep correction in the pair as markets are selling the Trade Deal news, with the Greenback seeing some newfound demand.

The selling has found a lower bound after marking oversold levels (0.65160 current session lows), forming the Immediate Pivot. The action still is more bearish than neutral with the ongoing lower consolidation.

The current lows allow for the formation of a downwards hourly channel where reactions to the lower bound will be key to watch for momentum decision – keep this one closely on your charts.
Get ready for the upcoming Australian Inflation data on Tuesday 21:30 (QoQ Inflation consensus at 0.8%, any beat will continue to diminish rate cut expectations, upward demand for the AUD and vice versa)

Safe Trades and successful week!

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