AUD/USD Price Forecast: Hawkish RBA Bets Support Rally Toward 0.7275

During the European session on Thursday, the Australian dollar extended its gains against the US dollar, trading around 0.71853. Earlier data showed Australia's July CPI came in higher than expected, intensifying market bets that the Reserve Bank of Australia will maintain a hawkish stance, providing core support for the exchange rate.

**Hawkish Central Bank and Dollar Weakness Form a Confluence**

Australia's sticky inflation has prompted markets to reprice the interest rate outlook, with expectations of policy divergence between the RBA and other major central banks serving as a key pillar for AUD bulls. Meanwhile, the US dollar remains on the defensive, constrained by diminished Fed rate hike expectations and improved risk appetite from easing geopolitical tensions. These combined factors have driven AUD/USD higher for a third consecutive session.

**Technical Focus on Upside Resistance Zone**

After breaking above the 0.7200 level, market attention has shifted to the resistance zone near 0.7250. Analysts note that AUD/USD previously touched multi-year highs in the 0.7275-0.7280 range, where some technical selling pressure exists. However, with the fundamentally bullish backdrop unchanged, dip-buying is expected to limit the scope of any pullback.

**Risk Variables to Watch Ahead**

Despite the intact short-term uptrend, the Australian dollar faces challenges in sustaining a prolonged one-way move. Market views suggest that a substantial improvement in Chinese demand and the dollar entering a structural downtrend are necessary conditions for medium-to-long-term AUD strength. Should energy price volatility or a resurgence in global risk aversion emerge, they could cap upside for the pro-cyclical Australian dollar.