Market Analysis

Australian Dollar Shows Positive Trend as RBA Holds Rate Steady

Dupoin · 08 Aug10.5K Views

AUDUSD

Prediction: Uptrend Expected

Fundamental Analysis:

On Thursday, the Australian Dollar (AUD) is showing a positive trend against the US Dollar (USD). This follows the Reserve Bank of Australia's (RBA) decision to keep the cash rate steady at 4.35% on Tuesday, reflecting a hawkish stance. RBA Governor Michele Bullock has also signaled that inflation remains elevated, suggesting that a rate cut is not imminent. However, recent inflation data for Australia’s second quarter has tempered expectations for further rate hikes, which may limit the Australian Dollar's gains. Market forecasts now indicate a potential RBA rate cut in November, a change from previous predictions of a cut in April next year.

Technical Analysis:

Currently trading around 0.6530, the AUD/USD pair is showing signs of consolidation above a descending channel, which suggests a reduction in the bearish trend. The 14-day Relative Strength Index (RSI) is climbing from the oversold 30 level, hinting at possible further gains. Key support is anticipated near the upper boundary of the descending channel at around 0.6470. A drop below this level could put downward pressure on the pair, potentially targeting the lower boundary of the channel at approximately 0.6420. On the resistance side, the nine-day Exponential Moving Average (EMA) at 0.6535 is the immediate hurdle, with additional resistance at 0.6575, where previous support has turned into resistance. A successful breach above this resistance could drive the AUD/USD pair towards a six-month peak of 0.6798.

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