The Australian Dollar (AUD) strengthened during Tuesday’s early European session following the Reserve Bank of Australia’s (RBA) decision to keep the key interest rate unchanged at 4.35% for the fifth consecutive meeting in June. The RBA’s Bullock press conference highlighted a hawkish tone, boosting the Australian Dollar as the case for a rate cut was not considered at this meeting. Investors will now focus on US Retail Sales and Industrial Production data for May to gauge the strength of the US economy.
The RBA’s decision to maintain the Official Cash Rate (OCR) steady indicates that the central bank believes there needs to be significant movement to bring inflation back to the desired range. The board did not discuss the possibility of a rate cut at this meeting and did not indicate whether the case for a rate hike is increasing, as high interest rates can negatively impact some sectors of the economy. The RBA’s monetary policy statement emphasized the persistence of inflation above target and the need for sustainable progress towards the target range.
In the technical analysis, the AUD/USD pair is trading above the key 100-day Exponential Moving Average (EMA) but remains fragile. The 14-day Relative Strength Index (RSI) is below the 50-midline, suggesting potential downside movement. The pair could face resistance at 0.6684, with support levels at 0.6580 and 0.6510 in case of extended losses. The first upside barrier is at 0.6684, with further resistance levels at 0.6715 and 0.6760.
The Australian Dollar has shown strength against major currencies in the last 7 days, particularly against the Japanese Yen. The percentage change data reflects the AUD’s performance against the USD, EUR, GBP, CAD, JPY, NZD, and CHF. The heat map displaying these percentage changes provides a visual representation of how the Australian Dollar has fared against other major currencies. The Australian Dollar’s strong performance against the Japanese Yen is notable in this context.
Overall, the Australian Dollar’s recent gains can be attributed to the RBA’s decision to maintain the OCR steady and the positive tone of the monetary policy statement. Investors will continue to monitor key US economic data releases for further direction in the currency markets. Technical analysis indicates potential downside risks for the AUD/USD pair, with support and resistance levels to watch. The Australian Dollar’s performance against major currencies in the last week showcases its strength relative to other global currencies.
