- Australian Dollar gains ground in Tuesday’s European session following the RBA’s Bullock press conference.
- The RBA decided to leave the key interest rate unchanged at 4.35% for the fifth consecutive meeting in June.
- Investors will shift their attention to US Retail Sales and Industrial Production for May, which are due later on Tuesday.
The Australian Dollar (AUD) trades on a stronger note on Tuesday during the press conference following the release of the June monetary policy decision. The Reserve Bank of Australia (RBA) held the Official Cash Rate (OCR) steady at 4.35% for the fifth meeting in a row in June. The RBA raised the OCR by 25 basis points (bps) last time in November 2023.
The hawkish RBA’s Bullock has boosted the Australian Dollar (AUD) as the case for a rate cut was not considered at this meeting. On the US docket, investors will keep an eye on US Retail Sales and Industrial Production for May. The Federal Reserve’s (Fed) Lisa Cook, Thomas Barkin, Adriana Kugler, Lorie Logan, Alberto Musalem, and Austan Goolsbee are set to speak later on Tuesday. The stronger-than-expected data could boost the USD and create a headwind for AUD/USD.
Daily Digest Market Movers: Australian Dollar trades stronger after the RBA interest rate decision
- The RBA’s board decided to stay the course on policy, indicating that the central bank needs a lot to go its way to bring inflation back to range.
- The board did not consider the case for a rate cut at this meeting and would not say that the case for a rate hike is increasing as high interest rates negatively impact some sectors of the country.
- The RBA’s monetary policy statement showed that inflation remains above target and is proving persistent and the central bank needs to be confident that inflation is moving sustainably towards the target range.
- RBA is not ruling anything in or out to ensure that inflation returns to target in a reasonable timeframe, per the statement.
- Philadelphia Fed President Patrick Harker said on Monday that one interest-rate cut is appropriate for this year if the US economy performed as expected. Harker further stated that he’d like to see “several” evidence of improving inflation, per Bloomberg.
- The US NY Empire State Manufacturing Index improved to -6.0 in June from -15.6. in the previous reading, above the consensus of the forecast of -9.0.
- Financial markets have priced in a nearly 62% odds rate cut from the US Fed on September 18, according to the CME’s FedWatch Tool.
Technical Analysis: AUD/USD finds some support above the key 100-day EMA
The Australian Dollar trades firmer on the day. The bullish stance of the AUD/USD pair remains fragile as it hovers around the key 100-day Exponential Moving Average (EMA) on the daily chart. The pair could resume its downside trajectory if it crosses below the key EMA, as mentioned. Furthermore, the 14-day Relative Strength Index (RSI) remains below the 50-midline, supporting the sellers for the time being.
The potential downside target for AUD/USD will emerge near the confluence of the 100-day EMA and the lower limit of Bollinger Band in the 0.6580-0.6585 zone. Extended losses will pave the way to 0.6510, a low of March 22. The next contention level is seen at 0.6465, a low of May 1.
On the other hand, the first upside barrier is located at 0.6684, the upper boundary of the Bollinger Band. A decisive break above the mentioned level will see a rally to 0.6715, a high of May 16. Further north, the next resistance level to watch is 0.6760, a high of January 4.
Australian Dollar price this week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.28% | -0.10% | -0.01% | -0.24% | 0.27% | 0.24% | -0.12% | |
| EUR | 0.27% | 0.16% | 0.25% | 0.02% | 0.55% | 0.50% | 0.13% | |
| GBP | 0.11% | -0.14% | 0.10% | -0.12% | 0.40% | 0.34% | -0.01% | |
| CAD | 0.01% | -0.27% | -0.09% | -0.19% | 0.30% | 0.25% | -0.11% | |
| AUD | 0.27% | -0.02% | 0.12% | 0.22% | 0.52% | 0.49% | 0.10% | |
| JPY | -0.29% | -0.56% | -0.41% | -0.27% | -0.52% | -0.04% | -0.43% | |
| NZD | -0.26% | -0.54% | -0.36% | -0.24% | -0.49% | 0.00% | -0.35% | |
| CHF | 0.12% | -0.12% | 0.01% | 0.13% | -0.11% | 0.44% | 0.35% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
