• AUD/USD kept its multi-week range bound in place on Tuesday.
  • The FX world traded within a broad-based consolidative range.
  • The RBA is expected to keep its policy rate unchanged this year.

AUD/USD alternated gains with losses once again around the 0.6650 region against the backdrop of an equally vacillating price action in the US Dollar (USD) on turnaround Tuesday.

The pair's irresolute movement mirrored the mood in the broader FX galaxy ahead of an eventful week, where the FOMC Minutes (July 3) and the Nonfarm Payrolls (July 5) are the salient events.

Once again, the Aussie dollar did not benefit from the slight recovery in copper prices and the small gains in iron ore prices, which extended the side-line pattern seen since the beginning of June.

On the monetary policy front, the Reserve Bank of Australia (RBA), similar to the Federal Reserve, is expected to be one of the last G10 central banks to begin lowering interest rates. In its recent meeting, the RBA took a hawkish stance, keeping the official cash rate at 4.35% and indicating flexibility for future decisions.

Furthermore, around the RBA, the bank published its Minutes of its latest hawkish hold, revealing that the primary reason members felt the case for keeping the policy rate unchanged was due to "uncertainty around the data for consumption and clear evidence that many households were experiencing financial stress."

The above now seems to highlight the upcoming release of May Retail Sales in Australia (July 3), which carries the potential to either bolster or weaken the case for a rate hike.

Additionally, the swaps market is currently pricing in a 25% chance of a 25 bps increase of the RBA policy rate at the next meeting on August 6, rising to 35% on September 24, and over 50% on November 5.

The potential easing by the Fed, contrasted with the RBA's likely prolonged restrictive stance, could support AUD/USD in the coming months. However, concerns about the slow momentum in the Chinese economy may hinder a sustained recovery of the Australian currency as China continues to face post-pandemic challenges.

AUD/USD daily chart

AUD/USD short-term technical outlook

If bulls seize control, the AUD/USD may reach its May peak of 0.6714 (May 16), followed by the December 2023 high of 0.6871 and the July 2023 top of 0.6894 (July 14), all before hitting the critical 0.7000 level.

Bearish efforts, on the other side, might push the pair lower, first to the June low of 0.6574 (June 10) and subsequently to the important 200-day SMA of 0.6556. A further drop might result in a return to the May low of 0.6465 and the 2024 bottom of 0.6362 (April 19).

Overall, the uptrend should continue as long as the AUD/USD remains above the 200-day SMA.

The 4-hour chart indicates a lack of significant growing momentum thus far. However, the initial barrier appears to be 0.6714, prior to 0.6728 and 0.6759. In contrast, the immediate support is about 0.6574, followed by 0.6558. The RSI rose to around 50.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD clings to gains near 1.0950 on US Dollar weakness

EUR/USD clings to gains near 1.0950 on US Dollar weakness

EUR/USD stays in positive territory near 1.0950 on Tuesday as the US Dollar (USD) struggles to find demand. The recovery in risk sentiment undermines the haven demand for the USD, lifting the pair. Dovish Fed expectations also weigh negatively on the Greenback. Markets await tariff headlines.

EUR/USD News
GBP/USD recovers toward 1.2800 on improving risk mood

GBP/USD recovers toward 1.2800 on improving risk mood

GBP/USD holds its ground and edges higher toward 1.2800 in the second half of the day on Tuesday. The pair draws support from renewed US Dollar weakness and a positive shift in risk sentiment but US President Trump's tariff war and global growth concerns could limit its upside. 

GBP/USD News
Gold bounces back above $3,000 as trade war tensions flair up

Gold bounces back above $3,000 as trade war tensions flair up

Gold price is bouncing higher in tandem with equities after another stellar nosedive move on Monday. The precious metal trades above the $3,000 to start the American session. The bounce is supported by a technical element on the one hand and a geopolitical driver on the other.

Gold News
XRP battles tariff turbulence amid MVRV buy signal

XRP battles tariff turbulence amid MVRV buy signal

Ripple seeks stability in a volatile crypto landscape influenced by macroeconomic factors, including reciprocal tariffs. The international money transfer token hit a low of $1.64 on Monday after opening the week at $1.92, representing a 14.5% daily drop. 

Read more
Strategic implications of “Liberation Day”

Strategic implications of “Liberation Day”

Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025