• AUD/USD kept its consolidation well in place on Tuesday.
  • Gains in the Greenback kept AUD under downside pressure.
  • The RBA’s Monthly CPI Indicator comes next on Wednesday.

AUD/USD resumed its downtrend and rapidly set aside Monday’s bullish attempt, maintaining its range-bound theme in the sub-0.6700 region well in place for yet another session on Tuesday.

Daily losses in the pair came in response to the rebound in the US Dollar (USD) as well as US yields across the curve, which maintained the price action around the risk-related universe subdued.

Adding to the sour sentiment in the Australian dollar, both copper prices and iron ore prices traded with humble losses, although well within their consolidation ranges.

Regarding monetary policy, the Reserve Bank of Australia (RBA), like the Fed, is among the last major central banks to alter its stance. At its last meeting, the RBA matched consensus and maintained a hawkish approach, keeping the official cash rate (OCR) at 4.35% and indicating flexibility for future decisions.

During her press conference, Governor Bullock confirmed that the board discussed possible rate hikes while ruling out cuts. Additionally, the bank remains focused on inflation, showing reluctance to ease policy unless necessary. The central bank emphasized that inflation is still above target and reiterated its commitment to taking the necessary actions to bring inflation back within the target range.

Furthermore, the swaps market currently estimates less than a 25% chance of a rate cut by December 2024, increasing to approximately 65% by February 2025.

The contrast between potential Fed easing and the RBA's likely prolonged restrictive stance could support AUD/USD in the next few months.

Meanwhile, unabated concerns about the slow momentum in the Chinese economy could hinder a sustained recovery in the Australian currency as China continues to face post-pandemic challenges.  

AUD/USD daily chart

AUD/USD short-term technical outlook

If bulls take control, AUD/USD may reach its May peak of 0.6714 (May 16), followed by the December 2023 high of 0.6871 and the July 2023 top of 0.6894 (July 14), all before the key 0.7000 threshold.

Bearish attempts, on the other hand, may send the pair lower, first touching the June low of 0.6574 (June 10) before reaching the important 200-day SMA of 0.6551. A deeper decline might result in a return to the May low of 0.6465 and the 2024 bottom of 0.6362 (April 19).

In general, the uptrend should continue as long as the AUD/USD trades above the 200-day SMA.

The 4-hour chart indicates a lack of upward momentum thus far. However, the initial barrier appears to be 0.6714, which is ahead of 0.6728 and 0.6759. In contrast, immediate support is at 0.6574, followed by 0.6558. The RSI fell to around 43.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD retreats below 1.0750 as USD rebounds

EUR/USD retreats below 1.0750 as USD rebounds

EUR/USD loses its traction and trades below 1.0750 in the American session on Monday, erasing a large portion of its daily gains in the process. Despite the disappointing PMI data, the US Dollar rebounds on cautious market mood and caps the pair's upside.

EUR/USD News

GBP/USD struggles to hold above 1.2650 as mood sours

GBP/USD struggles to hold above 1.2650 as mood sours

After rising above 1.2700 on Monday, GBP/USD struggles to hold its ground and retreats below 1.2650. The negative shift seen in risk mood helps the US Dollar recover and causes the pair to stretch lower despite the weaker-than-forecast US PMI data.

GBP/USD News

Gold struggles to gather bullish momentum, trades below $2,330

Gold struggles to gather bullish momentum, trades below $2,330

Gold finds it difficult to gather bullish momentum on Monday and trades below $2,330 in the American session. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.4%, causing XAU/USD's stay on the back foot.

Gold News

Crypto Today: Traders take $12 billion in profits in June, this will be the effect on Bitcoin

Crypto Today: Traders take $12 billion in profits in June, this will be the effect on Bitcoin

Bitcoin traders realized over $12.3 billion in profits on their holdings in June. Ethereum ETF issuers have at least one more round to go before SEC approval. Ripple ruling set a precedent for SEC vs. Binance lawsuit, XRP extends gains on Monday. 

Read more

Nine fundamentals for the week: Elections, Powell, and the build-up to Nonfarm Payrolls set the tone Premium

Nine fundamentals for the week: Elections, Powell, and the build-up to Nonfarm Payrolls set the tone

Will populists take over? In the UK, the answer is most likely no, but France poses risks to markets. Politics adds spice to an already busy kickoff of the second half of 2024. Here is the preview for this week’s major events.

Read more

Majors

Cryptocurrencies

Signatures