Introduction to AUD/USD Outlook
The Australian dollar has shown a significant rebound in the AUD/USD outlook, following a surprise decision by the Reserve Bank of Australia (RBA) to keep interest rates unchanged. This move has stunned markets, as economists and market participants were expecting a 25-bps rate cut. The RBA’s decision has led to traders pricing an 88% chance of a cut in August.
Recent Market Developments
The RBA’s decision was unexpected, given the current state of the economy and inflation. All signs had pointed to a rate cut, with the economy being weak and inflation having eased significantly. The central bank’s decision to wait and assess the situation further has led to a sharp rebound in the Australian dollar. Meanwhile, market participants remain cautious after President Trump sent out letters increasing tariffs on 14 countries, including Japan. This move has increased concerns about higher global tariffs, which could further harm the global economy.
AUD/USD Key Events Today
Traders do not expect any key releases from Australia or the US today. As a result, they will continue to digest the RBA’s decision and its implications for the AUD/USD outlook. The market reaction remains muted at the moment, but this could change as traders continue to assess the situation.
AUD/USD Technical Outlook
The AUD/USD price has bounced back sharply to retest the 30-SMA resistance. Initially, a sharp decline briefly pushed the price below a solid support zone comprising the 0.382 Fib level and the 0.6500 psychological level. However, bears were not strong enough to sustain the move, and the price rose back above the zone. The Relative Strength Index (RSI) has broken above 50, into bullish territory. If bulls maintain their momentum, the price is likely to break above the SMA, indicating a shift in sentiment and allowing AUD/USD to retest the 0.6590 resistance level.
Technical Analysis
The technical analysis of the AUD/USD price shows a potential shift in sentiment. The break above the 30-SMA resistance could lead to a retest of the 0.6590 resistance level. However, if the SMA holds firm, bears will remain in the lead, and the sellers will likely retest the support zone. A lower low would strengthen the bearish bias. The RSI’s move into bullish territory is a positive sign for bulls, but they need to maintain their momentum to sustain the upward move.
Conclusion
In conclusion, the AUD/USD outlook has shown a significant rebound following the RBA’s surprise decision to keep interest rates unchanged. The market remains cautious, given the potential for higher global tariffs and the implications for the global economy. The technical analysis shows a potential shift in sentiment, with the break above the 30-SMA resistance leading to a retest of the 0.6590 resistance level. However, the bears are still in the game, and the sellers will likely retest the support zone if the SMA holds firm. As always, traders should exercise caution and consider their risk management strategies before making any trades.
