Support AUD/USD falls despite improved Australian consumer confidence
Australian consumer confidence jumped to 88.9 in August. Despite this gain, the AUD/USD fell 0.26% to $0.7084, driven by expectations of a more hawkish Fed relative to the RBA.
Australia’s Westpac consumer confidence index rose 6.0% in August to 88.9, its highest level since November 2025.
Improved mortgage expectations underpinned confidence as concerns over further RBA rate hikes began to ease.
AUD/USD dropped 0.26% to $0.7084 as markets priced in a potentially more restrictive monetary stance from the US Fed.
Date: 18 August 2026
Australian consumer confidence improves, but AUD/USD remains under pressure
According to data published by Westpac Banking Corporation and the Melbourne Institute, the Australian consumer confidence index increased from 83.9 in July to 88.9 in August, representing a 6.0% rise—the strongest single-month increase since November 2025. This result demonstrates a notable recovery following a sharp decline in April 2026, when the index fell to the 80.1 mark. Analysis compiled by Trading Economics indicates that this improvement was primarily driven by shifting expectations among mortgage holders, who expressed diminished concern regarding further interest rate increases by the Reserve Bank of Australia (RBA).
However, following the macroeconomic release, the Australian dollar depreciated against the US dollar towards market close. The AUD/USD pair declined by 0.26% to $0.7084. In this context, market participants appear to judge it more likely that the Federal Reserve (Fed) will maintain a more restrictive policy stance in its upcoming decisions compared to the RBA, which has held its benchmark cash rate around the 4.35% level—a decade-high.
Figure 1. Australian Consumer Confidence (2023–2026). Source: Data from Westpac Banking Corporation and the Melbourne Institute; chart retrieved from Trading Economics.
Technical analysis of the AUD/USD pair
From a technical perspective, the AUD/USD pair continues to trade within an established bullish trajectory. Key technical observations include:
- Trend Context: The AUD/USD pair maintains a long-term bullish structure, characterised by a consistent sequence of higher highs and higher lows. Price action remaining above the 50-, 100-, and 200-day Simple Moving Averages (SMAs) reinforces this underlying upward trajectory.
- Resistance Levels: Should the pair sustain its upward momentum, immediate resistance is located at 0.7169, with the next major technical hurdle residing at the structural resistance ceiling of 0.7260. A decisive daily close above this pivot point would suggest renewed bullish momentum targeting higher valuation zones.
- Support Levels: If short-term support at 0.6945—a level that converges with the 200-day SMA—is breached to the downside, the next key demand zone is found at 0.6843. A decisive breakdown below 0.6843 would significantly increase the probability of a deeper market correction.
- Momentum Indicators: Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) display ascending trajectories, indicating that short-term bullish momentum could persist. Nevertheless, macroeconomic developments are expected to remain the primary drivers of near-term price action.
Figure 2. AUD/USD exchange rate (2025–2026). Source: Data from the Intercontinental Exchange (ICE); author's analysis conducted via TradingView.
