AUD/USD Forecast: No changes to the broader consolidation theme

• AUD/USD started the week on the back foot near 0.6650.
• Small gains in the Dollar were enough to keep AUD under pressure.
• The RBA Minutes come next on the domestic docket.

AUD/USD kicked off the new trading week with modest losses, hovering around the 0.6650 zone on the back of a mild upside bias in the US Dollar (USD) on Monday.

In fact, the pair's bearish price action was coupled with a slight advance in the Greenback ahead of quite an interesting week in the FX world, while the generalized upbeat mood in the risk complex failed to lend support to the Aussie dollar.

The Australian dollar was also unable to derive support from the tepid recovery in copper prices and small gains in iron ore prices.

On the monetary policy front, the RBA, like the Federal Reserve, should be one of the latest G10 central banks to start reducing its interest rates. In its latest meeting, the RBA maintained a hawkish approach, keeping the official cash rate at 4.35% and signaling flexibility for future decisions.

During that meeting, Governor Bullock confirmed that the board discussed potential rate hikes but ruled out cuts. The bank remains focused on inflation and is hesitant to ease policy unless necessary, emphasizing that inflation is still above target and reiterating its commitment to bringing inflation within the target range.

The contrast between potential easing by the Fed and the RBA's likely prolonged restrictive stance could support AUD/USD in the coming months. However, concerns about the slow momentum in the Chinese economy may impede a sustained recovery in the Australian currency as China continues to face post-pandemic challenges.

Data-wise, Down Under, the final Judo Bank Manufacturing PMI eased marginally to 47.2 in June (from 47.5).

AUD/USD daily chart

AUD/USD short-term technical outlook

If bulls gain control, the AUD/USD may hit 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 reaching the key 0.7000 milestone.

Bearish attempts, on the other hand, might take the pair lower, first to the June low of 0.6574 (June 10) and then to the key 200-day SMA of 0.6555. A further decrease might result in a return to the May low of 0.6465 and the 2024 bottom of 0.6362 (April 19).

Overall, the uptrend should continue as long as the AUD/USD is trading above the 200-day SMA.

The 4-hour chart shows a lack of substantial increasing momentum thus far. However, the initial barrier looks to be 0.6714, which is more than 0.6728 and 0.6759. In contrast, the immediate support is about 0.6574, followed by 0.6558. The RSI fell below 47.