September 28th chart of the week: AUD/USD - Navigating Fed rate hikes and Australian inflation data

• FOMC hawkishness elevates US yields, with CME pricing 65.9% odds of an Oct 25 bps hike to 4.00-4.25%¹ ahead of US PCE data.
• RBA rate-hike expectations persist² ahead of the Aug CPI, with YoY inflation projected to accelerate to 4.1%³ alongside cash rate hikes.
• AUD/USD broke primary trendline support, testing structural pivot around 0.7017 with oversold Stochastics (5.56) favoring a bounce.

This week, global financial markets are closely monitoring key economic releases from the United States and Australia. With critical data on inflation, labor, and central bank policy decisions on tap, these reports could drive significant volatility across major currencies.

Let’s first take a look at the overall context of what happened with the Fed and interest rate expectations this month. On September 16th, the Federal Reserve announced a quarter-point rate hike, bringing the target federal funds rate to 3.75%–4.00% in its first policy tightening since 2023⁴, accompanied by a distinctly hawkish message from Chairman Kevin Warsh emphasizing persistent inflation pressures⁵. Market expectations shifted toward further monetary tightening, with CME FedWatch probabilities showing a 65.9% chance of another 25 bps hike to 400–425 bps at the October 28th meeting and a baseline expectation of a cumulative 50 bps increase to 425–450 bps by December 9th¹.

The upcoming economic releases on Wednesday, September 30th, will center heavily on crucial inflation and consumer demand metrics that may impact the Federal Reserve’s interest rate trajectory.

• PCE price index gauges: According to Bloomberg’s economic calendar, the Fed’s preferred inflation gauge, the PCE price index MoM, is projected to rise to 0.3% (up from 0.2% prior), while holding steady at 3.7% YoY. Crucially, the Core PCE Price Index MoM is expected to uptick to 0.3% with the YoY rate persistent at 3.3%³. Coupled with stable Non-Farm Payroll labor additions, these sticky PCE readings may reinforce hawkish interest rate expectations for upcoming FOMC meetings.

• Consumer spending resilience: According to Bloomberg’s economic calendar, Personal Spending is forecast to accelerate sharply to 0.9% MoM (up from 0.2% previously), with Real Personal Spending rising to 0.5% MoM³. Robust consumer spending alongside steady employment gains demonstrates underlying economic strength, giving policymakers the flexibility to maintain a higher-for-longer policy stance.

Looking ahead to the October 2nd Non-Farm Payrolls (NFP) release, consensus forecasts, according to the Bloomberg economic calendar, project modest job additions of roughly 98,000, reflecting a moderating yet resilient expansion compared to August’s 162,000 gain. An upside surprise would further reinforce the case for continued rate hikes, making the employment release a critical risk event for treasury yields, the U.S. dollar, and global equities³.

The NFP outlook is supported by recent JOLTS data, where job openings edged slightly higher to 7.271 million (up from 7.182 million), signaling that underlying labor demand remains stable rather than undergoing a sharp contraction. At the same time, actual hiring activity has slowed alongside historically low layoff pressures, with total layoffs remaining muted at 1.666 million (a 1.0% rate)³.

Australia’s economic calendar for late September to early October 2026 focuses on key spending, central bank policy, and inflation metrics. On Monday, September 28, the Australian Bureau of Statistics is scheduled to release the August Household Spending indicator⁶. On Tuesday, September 29, the Reserve Bank of Australia is expected to raise the cash rate target (According to the Australian Securities Exchange) by 25 basis points to 4.60% (from 4.35%), underscoring a hawkish stance amid persistent inflation².

Later that evening, August headline CPI is forecast at 0.5% MoM, with the YoY rate accelerating to 4.1% (up from 3.5%), while Trimmed Mean CPI is expected at 0.3% MoM and 3.6% YoY. Additionally, August Private Sector Credit is expected to be 0.5% MoM, and Building Approvals are expected to contract by 1.0% MoM, marking an improvement over July’s 3.6% drop³.

• The daily chart for AUD/USD (as of September 28, 2026) displays a clear shift from an ascending structure into an active short-term correction so far, testing critical structural support around the 0.7017 level.
  
• Trendline Breakout & Correction: After forming a higher-high peak near 0.7230–0.7240 in early September, AUD/USD broke below its primary upward trendline (black ascending line) near 0.7110–0.7120. This breakdown accelerated selling pressure, pulling the pair down through its key moving averages.
  
• Moving Averages: The 9-period EMA (0.70665) has crossed below the 21-period MA (0.70721), confirming a bearish moving average cross (MA Cross (9, 21): 0.70721 / 0.71327). The spot price is currently trading beneath both moving averages.
  
• RSI (14): Currently sitting at 34.59, trending downward near oversold conditions but not yet displaying a bullish reversal signal.
• Stochastic (14, 1, 3): Deep in oversold territory at 5.56 / 5.65, indicating near-term downside exhaustion and potential for a relief bounce.

• Pivot Levels: Pivot point (P) at 0.71197 (Monthly) / 0.70563 (Weekly)
  
• Support Levels:
  Immediate support (S1): 0.70311 (Monthly S1) / 0.69721 (Weekly S1); holding psychological handle at 0.7000–0.7010
  
  Secondary support (S2): 0.68955 (Monthly S2) / 0.69199 (Weekly S2), aligning with July lows
  
• Resistance levels:
  Immediate resistance (R1): 0.71085 (Weekly R1) / 0.72553 (Monthly R1); a move above 0.7110 is required to neutralize bearish momentum
  
  Secondary resistance (R2/R3): 0.73439 (Monthly R2) and 0.74795 (Monthly R3)

In summary, AUD/USD stands at a pivotal junction as opposing fundamental drivers collide with crucial technical levels. While hawkish Federal Reserve expectations and elevated U.S. yields continue to exert downward pressure on the pair, upcoming Australian CPI data and persistent RBA rate-hike expectations provide underlying fundamental support. Technically, the pair’s breakdown from its primary trendline has brought prices to test critical structural support near 0.7017. With daily momentum indicators displaying deeply oversold conditions, a holding of this key pivot level could trigger a relief bounce toward immediate resistance at 0.7108, whereas a decisive break lower would open the door for a deeper correction toward July lows near 0.6900.

Abbreviation list:

EMA: Exponential moving average

SMA: Simple moving average

RSI: Relative strength index

% K: Fast stochastic

%D: Slow stochastic

MACD: Moving average convergence divergence

Pivot point: PP

Support: S

Resistance: R

Footnotes

¹https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

²https://www.asx.com.au/markets/trade-our-derivatives-market/futures-market/rba-rate-tracker

³https://www.bloomberg.com/markets/economic-calendar

⁴https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm

⁵https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260916.pdf

⁶https://www.abs.gov.au/statistics/economy/finance/monthly-household-spending-indicator