Can AUD/USD Hold Its 10‑Week High Ahead of CPI?

The Australian dollar is trading around 0.7150 against the US dollar, just off the 10‑week peak hit earlier this week. All eyes are now on Australia’s July CPI report (due August 26) and the subsequent Jackson Hole Economic Symposium (August 27–29).

Despite notably soft employment data, the Aussie has remained resilient. The primary driver is not a sudden improvement in domestic fundamentals, but persistent US dollar weakness – with the DXY trapped below 99 amid softening US jobs and inflation prints.

Weak Jobs Data, Yet AUD Holds Firm – Why?

Australia’s July employment fell by 15.8k (vs. +15k expected), pushing the unemployment rate to 4.5%. While full‑time jobs still grew, part‑time work declined and total hours dropped, signalling a genuine cooling in the labour market.

Markets pared back hawkish bets on the RBA, yet AUD/USD did not correct sharply. The reason: a weaker USD has been the dominant force. Over the past four weeks, the pair has rallied roughly 1.85%, with the greenback weighed down by its own soft data.

RBA Stance and the CPI Crucible

At its August 11 meeting, the RBA held the cash rate at 4.35% for a second straight time – but it has already delivered 75 bps of hikes since February 2026, and officials have explicitly kept the door open for further tightening. Deputy Governor Hauser recently warned that if inflation risks re‑emerge (from Middle East tensions, the global AI investment boom, or weak productivity), additional hikes could be back on the table.

The July CPI on August 26 will be pivotal:

• A hotter‑than‑expected print would reinforce the RBA’s hawkish bias, giving the AUD extra support.

• A downside surprise would erode the current rate‑hike premium, pressuring AUD/USD lower.

Key Technical Levels to Watch

• Resistance: 0.7200 (psychological level and immediate hurdle), then 0.7250.

• Support: 0.7100 (critical pivot for the recent uptrend), followed by 0.7085–0.7090, 0.7030–0.7050, and finally 0.7000.

As long as 0.7100 holds, the near‑term bias stays bullish. However, the pair has already rallied over 300 pips from its late‑July low and has yet to convincingly test 0.7200 – so a short‑term pullback cannot be ruled out.

Spillover Effects on Crypto Markets

As a classic commodity currency, the Aussie often moves in tandem with global risk appetite and commodity prices. A weaker USD generally favours risk‑on assets, including Bitcoin and the broader crypto space.

• If the CPI data supports a relatively hawkish RBA while the USD remains under pressure, risk sentiment could improve further, offering a macro tailwind for cryptocurrencies.

• Conversely, a significant CPI miss could trigger a reversal in AUD/USD and a temporary USD bounce, likely weighing on risk assets – including digital coins.

Additionally, any policy signals from Fed officials at Jackson Hole will influence both the dollar’s trajectory and the pricing of all risk assets, making it a must‑watch event for crypto traders.

Summary

AUD/USD’s resilience near 10‑week highs, despite weak jobs data, is largely a story of USD weakness. The July CPI will determine whether the RBA’s hawkish premium holds, while Jackson Hole may set the near‑term direction for the greenback.

For crypto traders, keeping an eye on major FX pairs like AUD/USD can provide valuable clues about shifts in risk appetite. In a market that never stands still, staying attuned to data and policy signals is far more productive than chasing price moves alone.