AUD/USD extended gains and tested the 0.6600 resistance level on Wednesday. This marked the fourth consecutive session of gains for the Australian Dollar. Improved risk sentiment from the US-Japan trade agreement supported the Aussie. At the same time, the US Dollar gained only mildly as trade jitters eased.
Recent weak jobs data in Australia failed to dent AUD’s momentum. Unemployment rose to 4.3%, and job creation slowed. However, the rally in AUDUSD is due to the drop in the US dollar index.
The Reserve Bank of Australia held rates steady, citing falling inflation expectations. The chart below shows that the consumer inflation expectations in Australia have dropped to 4.7% in July 2025. This drop in inflation suggests a more balanced outlook for inflation risks amid continued labour market strength.
AUD/USD Technical Analysis – Ascending Broadening Wedge Pattern
The 4-hour chart for AUD/USD shows that the pair is consolidating within an ascending broadening wedge pattern. These consolidation forms a bullish price structure above the 0.64 area. A break above 0.6620 could trigger a move toward 0.6690. However, 0.6690 remains a key long-term resistance level. Given the persistent bearish pressure on the US Dollar Index, a breakout above this resistance is likely. The pair is expected to trade higher, supported by continued weakness in the USD.
