Australian Dollar advances as hawkish RBA Minutes meet firmer US confidence data

AUD/USD trades higher near 0.6915 on Tuesday as investors digest the latest Reserve Bank of Australia (RBA) Meeting Minutes and a modest improvement in United States (US) Consumer Confidence. The Australian Dollar (AUD) found some support from the RBA’s hawkish tone, although the US Dollar (USD) remained neutral after falling partially due to end-of-quarter profit-taking.

The RBA Minutes from the June 16 meeting showed that policymakers unanimously decided to leave the cash rate unchanged at 4.35% while keeping the door open to further tightening if inflation fails to return sustainably to target. The Board noted that inflation remains materially above target, policy needs to stay restrictive, and it would do what is necessary to deliver price stability and full employment, including raising rates again if needed.

China-linked sentiment also supported the Aussie after the NBS Manufacturing PMI rose to 50.3 in June from 50.0, beating expectations of 50.1 and returning to expansion territory. Meanwhile, the NBS Non-Manufacturing PMI improved to 50.2 from 50.1, also above the 49.9 forecast. As China remains Australia’s largest trading partner, signs of stronger Chinese manufacturing and services activity tend to support the Australian Dollar by improving commodity demand expectations and broader risk appetite.

The Minutes also showed that the Australian economy continues to face excess demand and broad-based cost pressure. The RBA also noted that the Australian Dollar had depreciated slightly since the previous meeting, partly due to lower yield differentials against the United States and softer commodity prices.

On the US side, the Conference Board’s Consumer Confidence Index rose to 91.2 in June from May’s revised 90.6, showing a small improvement in household sentiment. The report noted that falling Oil prices helped ease consumer inflation fears, offering some support to the Greenback, while traders assess whether the US economy remains strong enough to keep the Federal Reserve (Fed) cautious.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6915. The pair holds above the 20-period Simple Moving Average (SMA) at 0.6895, hinting at a modest constructive tone, yet remains capped by the 100-period SMA at 0.6989, which preserves a broader topside barrier. The Relative Strength Index (RSI) near 54 stays just above its midline, suggesting slightly improving momentum.

On the topside, initial resistance is seen at the horizontal barrier at 0.6930, ahead of the longer-term 100-period SMA at 0.6989. On the downside, immediate support is clustered around 0.6904 and the 20-period SMA at 0.6895, followed by a secondary floor at 0.6890 and a deeper level near 0.6868, where buyers would be expected to re-emerge if the pair retreats.

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