After hitting fresh 2024 lows near 0.6350, AUD/USD bounced back to two-day highs above 0.6500 following the Reserve Bank of Australia’s decision to keep rates unchanged at 4.35%. The Aussie dollar found support on the hawkish message from the RBA, signaling a potential shift in the currency’s trajectory.
The focus now shifts to the critical 200-day SMA at 0.6592, with a negative bias expected below this level. The recent bounce in AUD/USD was also supported by a recovery in copper and iron ore prices, indicating a broader market sentiment shift.
RBA Governor Michele Bullock’s comments during the press conference highlighted the bank’s reluctance to cut rates in the near term, positioning the RBA as the last among G10 central banks to consider easing monetary policy. This contrast with potential easing by the Federal Reserve could provide support for AUD/USD in the coming months.
However, concerns about the Chinese economy’s slow recovery and lack of stimulus measures could pose challenges for the Australian dollar. The recent Politburo meeting in China failed to announce specific new stimulus measures, raising doubts about the country’s economic outlook and its impact on demand for Australian exports.
Technical Outlook:
In the short term, AUD/USD could revisit the 2024 bottom of 0.6347 before potentially testing lower support levels. On the upside, resistance lies at the 200-day SMA of 0.6592, followed by other key levels such as 0.6601, 0.6643, 0.6798, and 0.6871.
The four-hour chart suggests a period of consolidation, with support levels at 0.6347, 0.6338, and 0.6270. Resistance levels include 0.6559, 0.6610, and the 200-SMA of 0.6649. The RSI indicator is currently around 54, indicating a balanced market sentiment.
Overall, the combination of RBA’s hawkish stance, potential Fed easing, and Chinese economic challenges could shape the future direction of AUD/USD. Traders and investors should monitor key support and resistance levels to navigate potential market volatility in the coming weeks.