- AUD/USD rose for three consecutive days but may face hurdles ahead of the Reserve Bank of Australia meeting, impacting the upward trend.
- Analysts’ rate hike predictions decreased to one-in-three chance despite some being more hawkish, while Australian inflation remains above target.
- RBA’s decision could bring volatility to AUD/USD, with resistance levels at 0.66900 and 0.67200, but weakened momentum suggests exploring higher levels may not be feasible.
Yesterday, the AUD/USD experienced its third consecutive day of growth. However, the upward trend is expected to face obstacles during Tuesday’s trading session due to the impending Reserve Bank of Australia meeting.
Despite some analysts adopting a more hawkish stance and predicting a rate hike as the most likely outcome of today’s meeting, money market traders have reduced their forecast to a one-in-three chance of an increase, down from 40 percent on Friday afternoon.
Although inflation numbers in Australia have slowed down, the Consumer Price Index remains above the target range, while the key interest rate stands at 4.1 percent, below the CPI. Furthermore, recent remarks from RBA Governor Lowe have maintained a hawkish tone, leaving the possibility of further rate hikes open, even after two unexpected increases.
Who’s Right? Hawk Economists vs. Dove Traders – RBA meets Today by BlackBull_Markets on TradingView.com
As US markets remain closed in observance of Independence Day, the AUD/USD has been consolidating at 0.66700 prior to the RBA decision. With conflicting views from economists and traders, the meeting’s outcome has the potential to inject some volatility into the pair.
In terms of potential resistance levels, the initial zone to watch out for is around 0.66900, followed by 0.67200. However, it is important to note that considering the RSI’s decline below the 60.00 level, the upward momentum has weakened. Nevertheless, the overall inclination remains biased towards the upside. Therefore, exploring higher levels may not be immediately feasible.
