The Australian dollar continues to tread water in a narrow range, holding firm above 0.6520 as markets digest the Reserve Bank of Australia’s July decision to keep rates at 3.85%. In a surprise 6–3 vote, the central bank chose caution, opting to monitor inflation trends despite headline CPI falling back into its 2–3% target band. The RBA’s measured tone has raised odds of a rate cut in August, particularly as trimmed-mean inflation softens and unemployment edges up to 4.3%.
Meanwhile, broad US dollar weakness—driven by fiscal uncertainty and trade war anxieties—has provided a tailwind for the Aussie, improving global risk sentiment and optimism over tariff resolutions.
Technically, AUDUSD remains confined to the 0.6520–0.6600 range. A clean break above resistance at 0.6600 may set the stage for a rally toward 0.6680, while a failure to hold 0.6520 could expose downside targets near 0.6450. All eyes now turn to the upcoming RBA guidance and US inflation prints.
1. RBA’s surprise hold & easing outlook
In early July, the Reserve Bank of Australia unexpectedly held its cash rate at 3.85%, defying near‑unanimous market expectations of a cut, voting 6‑3 to wait for more inflation data before easing. While headline CPI sits within the 2–3% target, trimmed‑mean inflation and rising unemployment (~4.3%) have increased cut expectations for the August meeting.
2. USD weakness & risk sentiment support
Broad US dollar softness—from tariff fears to fiscal uncertainty—continues to buoy the AUD—improved market risk appetite and trade optimism further support AUD strength.
3. Technical range & momentum outlook
AUDUSD recently tested its ceiling near 0.6595–0.6600 after rebounding off support near 0.6520. The nine-day EMA (~0.6524) is key resistance—a breakout above may lift toward 0.6680, while failure risks a retreat toward 0.6470–0.6450.
Summary
AUDUSD remains range-bound 0.6520–0.6600, underpinned by dollar softness and the RBA’s dovish bias. A decisive move beyond 0.6600 could open a rally toward 0.6680, while a drop below 0.6520 may target 0.6450–0.6400. Key catalysts include RBA guidance, Australian labor data, US inflation/CPI, and global tariff headlines.
AUDUSD H3 Timeframe
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On this AUDUSD 3-hour chart:
Price was initially trending upward, supported by a rising trendline and a bullish sequence of higher lows and higher highs.
However, the market structure broke after price failed to sustain above the dynamic resistance zone (marked by the 50 EMA, 100 EMA, and 200 EMA — yellow, blue, and red lines, respectively).
A strong bearish impulse followed, breaking below the ascending trendline and creating a significant shift in momentum.
This break of structure is confirmed by the long bearish candle and the failure to reclaim the previous support zone near 0.6515–0.6535, which has now turned resistance (highlighted by the black rectangle).
Currently, price is pulling back into that same resistance zone where multiple confluences exist:
- The broken trendline (now retested from below),
- All three major moving averages are clustering overhead,
- The previous horizontal structure acted as resistance.
This setup suggests a textbook bearish retest, with the black arrow pointing to a potential downtrend continuation.
My Trading Plan:
If price shows any signs of bearish rejection in the 0.6515–0.6535 area (e.g., a bearish engulfing candle, pin bar, or rejection wick), I’ll consider entering a short trade.
Stop loss would be placed above the resistance box, and my first target would be around 0.6415–0.6400, aligning with previous demand levels.
Direction- Bearish
Target- 0.64380
Invalidation- 0.65383
CONCLUSION
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