The Australian Dollar (AUD) hit a fresh two-month high of 0.6373 on Monday, gaining momentum ahead of the much-anticipated Reserve Bank of Australia (RBA) rate decision. The AUD/USD pair surged as risk sentiment improved, driven by a weaker US Dollar (USD) and easing fears over former US President Donald Trump’s trade policies.
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Investors are increasingly favoring risk-sensitive assets, with global trade disputes boosting commodity-linked currencies like the Australian Dollar. As markets await the RBA’s monetary policy decision, traders are positioning for potential volatility, with the central bank expected to cut rates from 4.35% to 4.10%.
Australian Dollar in Tug-of-War: US Tariff Uncertainty and RBA Rate Cuts Shape AUD’s Fate
AUD/USD on the Brink of Recovery: Analysts Predict a Push Towards 0.6350
Daily Market Movers: Australian Dollar Poised for RBA Impact
- Risk sentiment remains strong, helping the Australian Dollar capitalize on the US Dollar’s retreat.
- The AUD/USD pair reclaimed the 0.6399 level—a key resistance zone—before slightly pulling back.
- With Australian inflation trending lower, markets are widely expecting a 25 basis point rate cut from the RBA on Tuesday.
- However, RBA policymakers could surprise markets with a hawkish stance, emphasizing tight labor conditions and lingering inflation risks.
- Investors will closely monitor the tone of the RBA statement, as Australia remains one of the last G10 economies to cut rates.
AUD/USD Technical Outlook: Bulls Gain Momentum Above 0.6365
The AUD/USD pair pushed past 0.6365 on Monday, marking its highest level since December. The technical indicators signal continued bullish momentum, with:
- Relative Strength Index (RSI) at 67, approaching overbought territory but still showing room for upside.
- Moving Average Convergence Divergence (MACD) histogram printing rising green bars, indicating strengthening bullish momentum.
- The pair breaking above the 20-day Simple Moving Average (SMA), signaling a strong near-term uptrend.
If risk appetite remains elevated and the market absorbs the RBA’s decision smoothly, the Australian Dollar could extend its gains towards the 100-day SMA at 0.6670.
Final Thoughts: Can the Aussie Sustain Its Rally Post-RBA?
As traders await the RBA’s rate announcement, the Australian Dollar remains strong, backed by a supportive risk environment and technical momentum. However, if the RBA delivers a more hawkish-than-expected stance, the AUD/USD pair could experience sharp volatility.
Will the Aussie maintain its upward momentum, or will the RBA’s policy shift curb its gains? Traders and investors alike will be closely watching the central bank’s next move.
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