The Australian Dollar is maintaining modest gains against the US Dollar, with AUD/USD trading just above 0.6500 during Thursday’s Asian session. A hawkish hold from the Reserve Bank of Australia (RBA) earlier this week and persistent weakness in the US Dollar amid trade tensions continue to support the Aussie.
Technical Outlook: AUD/USD Eyes Resistance Near 0.6590
AUD/USD is currently trading near 0.6577. The pair faces immediate resistance at the June 30 high of 0.6590, followed by the November 2024 peak at 0.6687. A sustained rally could even bring the psychological 0.7000 level back into focus.
On the downside, key support rests at the 200-day Simple Moving Average (SMA) at 0.6409. If that breaks, further levels to watch include 0.6372 (June 23 low) and 0.6356 (May 12 low), with deeper support at 0.6000 and the 2025 low of 0.5913 (April 9).
Momentum indicators are mixed. RSI above 53 shows mild bullish strength, while the ADX near 18 signals that the uptrend is not particularly strong at the moment.
RBA Policy Surprise Boosts Aussie Sentiment
The RBA kept its Official Cash Rate unchanged at 3.85% in a split decision, defying market expectations for a rate cut. While six board members voted to hold, three favored a reduction, signaling internal division on timing rather than direction.
Governor Michele Bullock reinforced the bank’s easing bias, stating that future rate cuts remain likely if inflation data for Q2 aligns with projections. Markets have now priced in a nearly 90% chance of a 25 bps cut at the August 12 meeting.
Global Risk Sentiment and Tariff Risks Weigh on the US Dollar
Comments from RBA Deputy Governor Andrew Hauser highlighted that global trade uncertainties—especially surrounding new US tariffs—are being closely watched. Hauser noted that Australia has yet to see the same sentiment decline observed in the US and Europe.
Meanwhile, the Federal Reserve left interest rates unchanged in June but flagged ongoing uncertainty. Fed Chair Jerome Powell noted that renewed tariff-driven inflation could complicate the rate path ahead. Divergence in policy outlook between the Fed and the RBA may add volatility to AUD/USD going forward.
China Data Offers Mixed Signals
China’s recent macroeconomic data showed improvement in industrial output and retail sales, supporting the forecast for 5% GDP growth in 2025. However, persistent disinflation, a sluggish property sector, and fading stimulus measures continue to present headwinds for Australia’s largest trading partner.
Positioning Data Shows Decline in Bearish Bets
According to the latest CFTC data (as of July 1), net short positions in the Australian Dollar have dropped to a two-week low of just over 70,000 contracts. Open interest has also increased for the third consecutive week, signaling a shift in market sentiment away from extreme bearishness.
Bottom Line:
AUD/USD remains supported above 0.6500 thanks to a hawkish RBA and fading US Dollar strength. However, mixed Chinese data and global trade uncertainty could limit the pair’s upside. Key resistance at 0.6590 remains the near-term level to watch.
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