AUD/USD’s eight-week rally is gaining momentum from a recovery in semiconductor stocks and improving risk appetite, while bullish technical signals point to further upside potential.
Key takeaways
- AUD/USD has posted eight straight weekly gains, supported by improving risk appetite and a rebound in global semiconductor stocks.
- AUD/USD remains in a major uptrend after reclaiming its 20- and 50-day moving averages, reinforced by positive MACD momentum.
- A break above 0.7180/0.7210 may expose 0.7265 and 0.7345, while a daily close below 0.7070 would invalidate the bullish tone.
The Aussie dollar has been on a tear to the upside since 30 June 2026, recording eight consecutive weekly gains against the US dollar, and AUD/USD ended the week of 17 August 2026 at a three-month high of 0.7171.
A bullish reversal in semiconductor chip stocks lifts AUD/USD
Fig. 1: Month-to-date performances of global stock indices with AUD/USD as of 21 Aug 2026 (Source: MacroMicro). The information presented is historical information, and past performance is not indicative of future performance.
The primary driver of the recent bullish movement in AUD/USD is likely its tight positive correlation with high-beta global stock indices, such as tech-heavy benchmarks, given that the AUD is often seen as a proxy for risk appetite.
The July sell-off in semiconductor chip stocks has paused. A potential bullish reversal is now taking shape in South Korea’s KOSPI and the US PHLX Semiconductor Sector Index, which recorded month-to-date gains of 10.5% and 2.7%, respectively, as of 21 August 2026, in line with a positive return of 2.4% in the AUD/USD over the same period (see Fig. 1).
Let’s now unpack the technicals of AUD/USD from a medium-term (multi-week) time frame.
Sell-off paused and reversed at the major ascending channel support
Fig. 2: AUD/USD medium-term trend as of 24 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The recent sell-off episodes seen in the AUD/USD have managed to test and stage bullish reversal movements twice (30 June 2026 and 29 July 2026), right at the lower boundary of the major ascending channel running from the 9 April 2025 low, indicating the major uptrend phase of the AUD/USD remains structurally intact.
The most recent bullish reversal on 29 July 2026 has triggered bullish breakouts above the 20 and 50-day moving averages, and AUD/USD price action has traded above these moving averages since 4 August 2026, implying the start of a potential new medium-term uptrend (see Fig. 2).
In addition, the 4-hour MACD trend indicator has continued to trend upwards steadily above its centreline. Watch the 0.7070 key medium-term pivotal support (also the 20-day moving average) to maintain the current medium-term uptrend.
A clearance above the 0.7180/0.7210 intermediate resistance zone sees the next medium-term resistances at 0.7265 and 0.7345.
However, a breakdown with a daily close below 0.7070 would negate the bullish tone, suggesting a deeper minor corrective pullback that could expose the next medium-term support at 0.7000 (also the 50-day moving average).
This article and its contents are intended for educational purposes only and should not be considered trading advice.
