AUD/USD falls to 0.7130 ahead of RBA decision

AUD/USD slipped to 0.7130 as short-term swaps markets almost fully priced a 25 basis point increase by the Reserve Bank of Australia. A 25bp rise would raise the cash rate to 4.35% and unwind last year’s cuts. The RBA will announce its decision at 12:30 p.m. Singapore time, followed by Governor Michele Bullock’s press conference at 1:30 p.m. SGT.

The RBA will publish its quarterly forecasts with the decision. The update is the first official outlook to factor in effects from the Middle East conflict. Economists surveyed ahead of the release expect weaker growth, softer hiring and a slower return of inflation to the bank’s 2%–3% target band.

From a technical perspective, AUD/USD remains inside an ascending channel that began at the March 30 low of 0.6833 and is trading above its 20-day moving average. Near-term resistance levels are 0.7200, 0.7244/0.7265 and 0.7300. Support is at 0.7100 and 0.7055, the 50-day moving average; a sustained move below 0.7055 would place the pair below that average, a level watched by traders.

Price action over the previous two trading sessions showed a roughly 1% corrective decline, drawing the pair toward the channel’s lower boundary and the 20-day average. Hourly momentum indicators entered oversold territory and registered a bullish divergence.

Market participants are focused on Bullock’s comments for guidance on further tightening. Analysts outline a scenario in which a clear warning that oil prices above $100 per barrel could cause demand destruction in late 2026 would be treated by traders as a downside risk for the Australian dollar and could put pressure on the 50-day moving average.

The analysis was prepared by Kelvin Wong of OANDA’s MarketPulse, who highlighted the press conference and the quarterly update as events likely to shape near-term expectations for Australian rates and the currency.