Australian Dollar trades near weekly high after RBA decision

AUD/USD trades moderately higher above the 0.7060 price region after the Reserve Bank of Australia (RBA) left interest rates unchanged at 4.35% in a unanimous decision at the August monetary policy decision.

After the announcement, RBA Governor Michelle Bullock said that they “will raise rates again if needed” and that she hopes to see progress before being confident in the Consumer Price Index (CPI).

On the United States (US) side, the ADP Employment Change 4-week average noted that the private sector added 8.25K jobs on the week ending July 25, lower than the previous, revised figure of 11K.

Despite the lower-than-expected report, the US Dollar Index (DXY) remains flat amid the Strait of Hormuz blockade continuing, with reports that US forces fired on a Panama-flagged ship Tuesday after it allegedly ignored warnings while attempting to breach the American blockade of Iranian ports.

RBA seen on extended hold as Standard Chartered flags late 2027 inflation return

According to Standard Chartered, the RBA continues to project a very gradual disinflation, with the bank highlighting that it “expects inflation to only return to the midpoint of its 2-3% range by late 2027.” It notes that tighter financial conditions are already weighing on activity, pointing to an easing labor market and cooling housing prices, alongside “tentative signs of slowing consumer spending growth.”

Against this backdrop, Standard Chartered writes that “our base case remains no more RBA rate hikes in the foreseeable future,” but cautions that the balance of risks is not entirely one-sided. The bank stresses that “the risk to our view is skewed towards a hike in Q4 if demand does not slow sufficiently or if energy prices revisit recent highs, exacerbating both capacity and price pressures.”

Ultimately, Standard Chartered argues that “easing labour-market conditions, if sustained, should help contain underlying wage and price pressures in the economy,” reinforcing its view that a prolonged period of steady policy, rather than renewed tightening, remains the most likely path.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7069, maintaining a modest bullish bias as it holds above both the 20-period Simple Moving Average (SMA) at 0.7052 and the 100-period SMA at 0.7012. The pair is pressing a nearby horizontal barrier at 0.7070, with a secondary cap at 0.7074, while the Relative Strength Index (RSI) around 60 hints at constructive but not overextended upside momentum.

On the downside, initial support is seen at the horizontal level of 0.7062, followed by 0.7055, with the 20-period SMA at 0.7052 and the 100-period SMA at 0.7012 reinforcing the underlying demand on deeper pullbacks. On the topside, immediate resistance is located at 0.7070, ahead of the next hurdle at 0.7074, and a sustained break above this cluster would open the way for a continuation of the recent advance.

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