AUD/USD edges higher as the RBA hikes, but gains stay limited
- The RBA hiked the cash rate by 25 basis points to 4.35%, citing persistent inflation and resilient private demand.
- Crude prices stayed elevated as the Strait of Hormuz closure dragged on, weighing on broader risk sentiment.
- Friday's US NFP release will be the next major test for the US Dollar after a soft 60K consensus print.
AUD/USD edged higher by 0.25% on Tuesday, settling close to 0.7185 after finding support around 0.7150 during the European session. Price has been carving out a narrow range across the past few sessions, with overlapping wicks and small-bodied candles pointing to indecision as traders digested the RBA decision.
The Reserve Bank of Australia (RBA) hiked the cash rate by 25 basis points from 4.10% to 4.35% on Tuesday, citing persistent inflation pressures and stronger-than-expected private demand growth. The Board signaled it remains data-dependent on further moves, with the Monetary Policy Statement noting that capacity pressures had re-emerged. Australian trade data on Thursday and Chinese trade figures over the weekend will offer the next read on external demand.
On the US Dollar side, crude oil prices stayed elevated as the Strait of Hormuz closure dragged into a third month, with diplomatic talks yielding no firm ceasefire timeline. Tuesday's Institute for Supply Management (ISM) Services PMI came in at 53.6, just shy of consensus, while JOLTS job openings beat expectations at 6.87M. Friday's US Non-Farm Payrolls (NFP) release, with consensus pointing to a soft 60K print after the previous month's 178K, will set the tone for the US Dollar into next week.
AUD/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, AUD/USD trades at 0.7184. The pair holds a modest bullish intraday bias while price stays above the daily open at 0.7169, suggesting dip-buying interest on shallow pullbacks. The latest Stochastic RSI reading around 9.49 sits in oversold territory, hinting that downside momentum is waning after the recent consolidation near current levels.
On the downside, initial support is located at the daily open around 0.7169, where a break would undermine the constructive tone and expose deeper losses toward the prior session’s lows. With no nearby technical resistance levels from moving averages or oscillators on this timeframe, any recovery from oversold conditions could see the pair extend gains in search of fresh intraday supply zones above the market.
In the daily chart, AUD/USD trades at 0.7184, holding a clear bullish bias as spot remains above both the 50-day Exponential Moving Average (EMA) at 0.7066 and the 200-day EMA at 0.6823. The positioning over these key trend gauges suggests the broader uptrend remains intact, while the Stochastic RSI near 50.8 signals neutral momentum after easing from prior overbought conditions, hinting at consolidation rather than immediate exhaustion.
On the downside, initial support is located at the 50-day EMA around 0.7066, where a break would expose the deeper structural floor at the 200-day EMA near 0.6823. With no nearby technical resistances provided by the current dataset, traders may look to emerging swing highs on the price chart itself to define fresh topside barriers as long as the pair continues to defend these moving-average supports.
(The technical analysis of this story was written with the help of an AI tool.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
추천 기사
