AUD/USD Forecast: At 2024 highs ahead of RBA’s monetary policy decision

AUD/USD Current Price: 0.6844

• The better market mood underpinned the Aussie at the beginning of the week.
• The Reserve Bank of Australia will likely maintain interest rates on hold once again.
• AUD/USD consolidates gains near fresh yearly highs, maintaining its positive momentum.

The AUD/USD pair traded as high as 0.6852 on Monday, a level last seen on December 2024, as the generalized optimism coupled with persistent US Dollar (USD) weakness. The USD found near-term demand at the weekly opening after edging lower last week but changed course in the mid-European session, maintaining the sour tone throughout the rest of the day.

The positive tone of global indexes, reflecting increased optimism following the Federal Reserve’s (Fed) monetary policy decision last week, underpinned AUD/USD. The pair stabilized in the American afternoon as buyers paused ahead of the Reserve Bank of Australia (RBA) monetary policy decision. The central bank is widely anticipated to keep the Official Cash Rate (OCR) unchanged at 4.35% for the seventh straight meeting, as Governor Michele Bullock has clearly stated that the Board did not expect to be in a position to cut rates in the near term, not so 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 out of the table. The expected hawkish stance from RBA officials will likely maintain AUD/USD on the bullish side.

AUD/USD short-term technical outlook

From a technical point of view, AUD/USD has room to extend its advance. The daily chart shows that technical indicators head sharply lower, well above their midlines, but not yet presenting overbought conditions.  At the same time, the pair develops above bullish moving averages, with the 20 Simple Moving Average (SMA) gaining upward traction some 100 pips below the current level.

The 4-hour chart shows technical indicators hold within positive levels, although without strength enough to confirm another leg north. The Momentum indicator bounced from around its 100 line but remains well below its intraday high, while the Relative Strength Index (RSI) indicator consolidates at around 64.

Support levels: 0.6820 0.6775 0.6730

Resistance levels: 0.6870 0.6910 0.6945