At highs since 2024 before RBA monetary policy decision

AUD/USD Current Price: 0.6844

• Better market sentiment supported the Aussie earlier in the week.
• The Reserve Bank of Australia is likely to keep interest rates on hold again.
• AUD/USD consolidates gains near fresh annual highs, maintaining positive momentum.

AUD/USD traded as high as 0.6852 on Monday, a level last seen in December 2024, as widespread optimism coupled with persistent weakness in the US dollar (USD). The USD found short-term demand at the weekly open after falling last week, but reversed course in the mid-European session, maintaining a sour tone throughout the rest of the day.

The positive tone in global indices, reflecting increased optimism following last week’s Federal Reserve (Fed) monetary policy decision, supported AUD/USD. The pair steadied in the US afternoon as buyers paused ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision. The central bank is expected to keep the official cash rate (OCR) unchanged at 4.35% for the seventh consecutive meeting, as Governor Michele Bullock made clear that the Board did not expect to be able to cut rates in the short term . , not long ago.

Stubbornly high inflation and a relatively tight labor market support policymakers’ stance. With that in mind, a rate cut for this year is completely off the table. The expected dovish stance from RBA officials is likely to keep AUD/USD on the bullish side.

AUD/USD Short-Term Technical Outlook

Technically, AUD/USD has room to extend its lead. The daily chart shows that the technical indicators are turning sharply lower, well above the median lines, but are not yet showing overbought conditions. At the same time, the pair is developing above bullish moving averages, with the 20 Simple Moving Average (SMA) gaining upward traction about 100 pips below the current level.

The 4-hour chart shows technical indicators holding positive levels, albeit without enough strength to confirm another move north. The Momentum indicator is back around the 100 line, but remains well below its intraday high, while the Relative Strength Index (RSI) indicator is consolidating around 64.

Support levels: 0.6820 0.6775 0.6730

Resistance levels: 0.6870 0.6910 0.6945