AUD/USD Price Forecast: Struggles to lure buyers despite hawkish RBA; Fed decision awaited

AUD/USD attracted some intraday sellers in reaction to a narrow 5-4 RBA rate hike vote split.
Inflation concerns temper Fed rate cut bets, underpinning the USD and capping spot prices.
The RBA’s hawkish stance acts as a tailwind for the Aussie as traders await the Fed decision.

Haresh Menghani FXStreet

The AUD/USD pair struggles to capitalize on the previous day's goodish rebound from sub-0.7000 levels and seesaws between tepid gains/minor losses through the early European session on Tuesday. The Reserve Bank of Australia's (RBA) hawkish signal acts as a tailwind for the Australian Dollar (AUD), though the emergence of fresh US Dollar (USD) buying keeps a lid on the currency pair.

As was widely expected, the RBA raised the Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% from 3.85% at the end of its March monetary policy meeting earlier today. However, a surprisingly narrow 5–4 rate hike vote split pointed to a significant divergence of views within the committee about the appropriate response to evolving inflation dynamics. This caused the AUD/USD pair to wobble and retreat slightly from the vicinity of the 0.7100 mark in choppy trading.

In the accompanying policy statement, the RBA noted that there is a material risk that uncertainties in the Middle East could add to domestic inflation, which will remain above target for longer than anticipated. In the post-meeting press conference, RBA Governor Michele Bullock stressed that the board was united in the cash rate needing to climb to combat inflation and argued that the close vote was more about the timing rather than the direction of policy settings.

In fact, almost two more RBA rate increases by the year-end is fully priced in, which, in turn, offers some support to the AUD. Meanwhile, the recent surge in Crude Oil prices has triggered a sharp repricing of rate outlooks by major central banks, including the US Federal Reserve (Fed). This assists the USD to attract fresh buyers following the overnight pullback from its highest level since May 2025 and holds back the AUD/USD bulls from placing fresh bets.

AUD/USD 4-hour chart

Technical Analysis:

The near-term bias is mildly bullish as spot prices hold above the 200-period Exponential Moving Average (EMA) on the 4-hour chart, which underpins price near 0.7017 and signals a recovering upward tone after last week’s dip. Adding to this, the Moving Average Convergence Divergence (MACD) line has turned back above its signal around the zero mark, and the positive histogram bars suggest improving bullish momentum rather than strong trending conditions. Furthermore, the Relative Strength Index (RSI) around 53 reinforces this moderate upside bias, reflecting a slight advantage for buyers without overbought pressure.

Initial support emerges at 0.7065, with a break exposing the 0.7035 area ahead of the 0.7017 region, where the 200-period exponential moving average lends additional backing. Below this, 0.6990 forms a deeper support that would neutralize the current recovery if lost. On the upside, immediate resistance stands at 0.7100, followed by 0.7135, where recent highs converge and may cap advances on first test. A sustained move through 0.7135 would open the way toward 0.7175, reinforcing the bullish bias and shifting focus to higher levels.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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