The AUD/USD pair started the week on a positive note, climbing 0.30% to reach 0.6790 on Monday. Market sentiment remains subdued as traders focus on upcoming economic data releases, including Australia’s Q2 GDP figures and a speech by RBA Governor Bullock later in the week.
Despite uncertainties in the Australian economy, the RBA has maintained a hawkish stance, with expectations of only a minimal interest rate cut by 2024. However, recent data on retail sales and capital expenditure suggest potential downside risks to the GDP forecast.
Key Events Impacting the AUD/USD Pair
- Australia’s Q2 GDP data is set to be released on Wednesday, with forecasts of 0.2% QoQ growth and a 0.9% YoY rate.
- RBA Governor Bullock is expected to reiterate the bank’s hawkish guidance on Thursday, despite market expectations of a rate cut in December.
- Market sentiment indicates an 80% chance of a rate cut in December, reflecting concerns about sluggish economic growth.
Technical Analysis of AUD/USD
The Relative Strength Index (RSI) is at 64, indicating strong momentum, while the Moving Average Convergence Divergence (MACD) shows flat but positive movement. The pair faces resistance at 0.6800, with potential upside towards 0.6830-0.6850. Support levels are at 0.6760 and 0.6740.
Understanding the Role of the RBA in Currency Markets
The Reserve Bank of Australia (RBA) plays a crucial role in setting interest rates and managing monetary policy. Decisions made by the RBA impact the value of the Australian Dollar (AUD) in global currency markets. Factors such as inflation, economic growth, and interest rate policies influence the RBA’s actions and, in turn, affect the exchange rate of the AUD.