AUD/USD: RBA puts policy on hold – OCBC

Australian Dollar (AUD) holds modest losses post-RBA decision to keep policy on hold, as widely expected. AUD was last at 0.6503 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Some risks to the downside are not ruled out

"The SOMP projected for underlying inflation to accelerate to 3.2% this year and stay there through June 2026, while forecasts for unemployment were nudged up to 4.4%. SOMP also highlighted that last week’s third quarter inflation report as 'stronger than expected', which 'suggests there could be a little more underlying inflationary pressure than we previously thought'."

"That said, RBA noted that wage growth has eased and some of 3Q underlying inflation increase was temporary."

"Mild bullish momentum on daily chart shows tentative signs of easing while RSI fell. Some risks to the downside is not ruled out, given the broader USD bounce. But we are biased to buy on dips. Support at 0.6510, 0.6480 before 0.6445 (200 DMA). Resistance at 0.6560 (50 DMA), 0.6620 levels."