Australian Dollar Weakens Amid RBA’s Paused Rates with Hawkish Outlook Intact

The Australian Dollar (AUD) declined slightly on Tuesday as the Reserve Bank of Australia (RBA) held its cash rate at 4.35%, concluding a period of tightening. While the RBA acknowledged the need for ongoing vigilance against inflation, its statement tempered expectations of near-term hikes, contributing to the currency’s cautious movement around 0.7070 against the US Dollar (USD).

Australian economic data further reinforced the RBA’s pause, with first-quarter GDP growth at 0.3% and unemployment rising to 4.5%, signaling muted domestic demand. This context provided little immediate pressure on the RBA to deviate from its policy stance. However, officials emphasized that future decisions would remain data-dependent, maintaining a tone of measured preparedness.

Market attention also shifted toward the upcoming Federal Reserve meeting, as investors assessed potential policy signals from the US central bank. Meanwhile, technical indicators suggest AUD/USD remains vulnerable to profit-taking but retains short-term bullish momentum above key support levels. Analysts note potential resistance targets at 0.7080 and 0.7106, with critical support holding below 0.7057. The paired currency faces divergent global market forces, balancing inflation concerns across the Pacific region.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7071, maintaining a mildly bullish near-term tone as it holds above the 20-period Simple Moving Average (SMA) at 0.7057 and a band of nearby horizontal supports clustered around 0.7069. Momentum remains constructive, with the Relative Strength Index (RSI) hovering near 56, suggesting buyers still have the upper hand, while upside follow-through has yet to decisively challenge the thicker overhead resistance layer.

On the topside, initial resistance is aligned at 0.7080, ahead of the more significant cap from the 100-period SMA at 0.7106, which currently defines the upper boundary limiting further gains. On the downside, immediate support is seen at 0.7069, backed by additional floors at 0.7057, 0.7056, and 0.7043; as long as price holds above this support stack, the pair is likely to remain bid on dips, with a clear break above 0.7106 needed to reinforce a stronger bullish extension.

(The technical analysis of this story was written with the help of an AI tool.)

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