Australian Dollar rallied sharply today after RBA Governor Michele Bullock signaled to Parliament that policymakers remain ready to tighten policy if inflation shows renewed persistence. Markets took her remarks as a clear indication that a rate hike in 2026 is possible—and that easing is firmly off the table for now. .
Soft Q3 GDP numbers briefly tempered expectations, but failed to stall Aussie’s advance. While quarterly growth undershot forecasts at 0.4% qoq, the 2.1% yoy expansion was still the strongest pace in two years, keeping concerns alive that domestic demand may be too resilient for inflation to retreat as quickly as hoped.
Markets now largely agree that rate cuts are off the table for an extended period, and a pre-emptive hike cannot be ruled out if upcoming data surprise on the upside.
Technically, AUD/USD’s break above 0.6579 reinforces that the correction from 0.6706 likely ended at 0.6420. The uptrend from the 2025 trough at 0.5913 may now be resuming, setting up a retest of 0.6706 peak. The key question is whether bullish momentum can build into that level or whether upside energy fades on approach.
AUD/JPY is also attempting a significant breakout as it challenges a dense cluster of resistance around 102. This zone includes the medium-term rising channel ceiling and the key 102.39 structural pivot. A clean break would represent an important bullish confirmation for longer-term AUD strength.
As long as 100.33 support holds, outlook for AUD/JPY stays bullish. Decisive break above 100% Projection of 94.38 to 100.93 from 96.24 at 102.79 should trigger upside acceleration towards 161.8% projection at 106.83.
