AUD/USD Price Extends Gains as Strong Domestic Demand Counters Soft GDP Print

• AUD/USD price remains calm near 0.6580 after posting solid gains.
• Australia’s Q3 GDP revealed the underlying resilience of the Australian economy.
• Fed easing and the dovish next Fed Chair continue to pressure the greenback.

The AUD/USD price remains on the front foot, trading near the 0.6580 level as the Australian dollar extends its 2-week rally against a weaker US dollar. Despite a softer Q3 GDP, the underlying details reflected resilience in the Australian economy, which aided the AUD in recovering quickly from the sell-off.

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The Australian economy in the third quarter slowed to 0.4% QoQ, against 0.7% expected. However, annual growth accelerated to 2.1%, the fastest pace in the last two years. Although the headline growth missed the forecast, solid public and private investments, as well as firm household spending, offset a drag from inventories and weaker net trade. This indicates the recovery signs in Australia’s economy as it heads into 2026.

The GDP breakdown also prompts traders to reassess their expectations for RBA policy. RBA Governor Michele Bullock commented earlier on Wednesday that the central bank is assessing whether inflation pressures are temporary or not. The Australian CPI rising to 3.8% YoY in October, while trimmed-mean inflation surging to 3.3%, showed limited scope for near-term easing by the RBA. Institutions like OCBC and Standard Chartered anticipate the cash rate to stay unchanged at 3.60% at the 9^th December meeting. The risk tilts towards a more hawkish tone, while swaps fully price in a rate hike by the end of 2026.

On the other hand, the US dollar remains near two-week lows as markets price a 90% probability of a 25 bps rate cut next week. Speculations around the next dovish Fed Chair also add downward pressure on the greenback. Meanwhile, risk sentiment remains constructive amid optimism for a Russia-Ukraine peace agreement. Meanwhile, China’s Services PMI slipped to 52.1 from 52.6 but is still above expectations, helping Aussie stay positive.

AUD/USD Key Events Ahead

The major data releases ahead include:

• US ADP
• ISM Services PMI

Disappointing data could reinforce the bullish momentum in AUD/USD.

AUD/USD Technical Price Analysis: Potential Consolidation Before Upside

The 4-hour chart for the AUD/USD suggests a potential consolidation as the price stays near the key resistance level at 0.6580. Any clear breakout will aim to move higher to test October highs near 0.6620. However, the immediate resistance level, combined with an overbought RSI signal, leads to a potential downside correction.

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The downside could test the 20-period MA near 0.6550 before upside continuation. The 50- and 100-period MA are positioning to form a bullish crossover, reflecting a limited downside.

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