Can the high-flying Aussie dollar survive NFP and tech volatility?

Aussie dollar posts third straight weekly gain as RBA stays hawkish

AUD/USD finished higher last week at 0.6635 (+0.18%), marking a third consecutive week of gains and its highest weekly close since October 2024.

Last week’s gains were fuelled by a combination of domestic and offshore factors. The Reserve Bank of Australia (RBA) decision to hold rates steady on Tuesday at 3.60% carried a distinctly hawkish tone, with strong commentary on the upside risks to inflation and the potential for rate hikes next year. This contrasted with the Federal Reserve (Fed) 25 basis point (bp) cut, which came with guidance that was less hawkish than feared, supporting a softer United States (US) dollar across the board.

Labour data cools bullish momentum

However, the upside momentum in AUD/USD cooled toward the end of the week. Thursday’s Australian labour force report for November delivered mixed signals: while the unemployment rate held steady, it was accompanied by a sharp drop in the participation rate and a loss of jobs, masking underlying softness in employment growth. This prompted markets to trim expectations on RBA rate hikes throughout 2026 from two 25 bp hikes to one and a half.

Friday’s session of risk-aversion flows – driven by renewed pressure on US tech stocks following disappointing updates from Oracle and Broadcom – added further headwinds, capping the pair’s upside.

Looking ahead, the outcomes of Tuesday’s Australian consumer confidence reading (previewed below) and Wednesday morning’s non-farm payrolls (NFP) report will be influential in determining what comes next for the high-flying Australian dollar.

Westpac consumer confidence

Date: Tuesday, 16 December at 10.30am AEDT

For November, Australian consumer confidence soared by 12.8% to 103.8.

Excluding Covid-19 pandemic disruptions, this was the most positive reading in seven years, supported by signs of economic recovery and easing external risks. Notably, the surge occurred despite a sharp rise in RBA rate hike expectations following the red-hot third-quarter (Q3) consumer price index (CPI) report released in late November.

Across the sub-indexes, there was a broad-based boost in sentiment with the notable exception of labour market views as unemployment expectations increased 9.3% to 139.5, remaining above the long-term average.

Looking ahead, last week’s hawkish RBA ‘on hold’ decision and increased chatter regarding rate hikes in the first half of 2026 are expected to see consumer sentiment ease back towards the 100 mark in December.

Australian consumer confidence chart

AUD/USD technical analysis

After reaching a high of 0.6617 at the end of October, AUD/USD fell to a three-month low of 0.6419 on 21 November. That low was in the vicinity of the 0.6420 support zone, which has repeatedly held as a floor in AUD/USD since early August.

From that point, AUD/USD mounted an impressive flight back, rallying over 4% in just three weeks to a high of 0.6685. In the process, it reclaimed the 200-day moving average (MA) now at 0.6482 and then broke above a cluster of horizontal resistance at 0.6620 – 0.6630, which had capped AUD/USD since mid-September.

Provided AUD/USD continues to hold above short-term support in the 0.6620 – 0.6630 area, we expect the pair to test the 0.6706 high from mid-September, followed by trend channel resistance around 0.6740.

Conversely, a sustained move below 0.6620 – 0.6630 would warn of a deeper pullback towards the 0.6550 – 0.6580 zone.

AUD/USD daily chart

• _{Source: TradingView. The figures stated are as of 15 December 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}