COMMENT-Central banks, techs may help drive big rally in AUD/USD

AUD/USD traded lower Friday but the longer-term outlook appears bullish as influences from central banks, technicals and potential China stimulus could turn pullbacks into buying opportunities.

As major central banks embark on easing cycles, rates markets indicate investors are positioning for the Fed to cut more than the RBA. By year-end 2025 investors have discounted nearly 195bps of Fed (SRAH26) cuts but less than 100bps from the RBA (YBAH6), which could help limit AUD/USD dips.

The latest Australia jobs report dashed hopes for an early cut from the RBA.

In an effort to support growth, Chinese regulators are considering removing restrictions on house purchases according to a Bloomberg report.

China's yuan, a proxy for the Australian dollar, hit a 16-month high versus the U.S. dollar after the report. USD/CNH and AUD/USD are inversely correlated. Further yuan gains could help support AUD/USD.

Technicals suggest significant gains are possible. Rising monthly RSI and September's bull hammer candle are very bullish signs. AUD/USD's hold above a slew of daily moving averages and its recent rally to an 8-month high reinforce bullish signals.

AUD/USD longs face resistance in the 0.6840/0.6900 region. A rally through that zone may trigger stop loss buying. Bulls could then target the 0.7155/75 and 0.7280/0.7300 zones.

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