The Reserve Bank of Australia (RBA) is set to cut interest rates for the first time in four years when it announces its decision later today at 10:30 PM ET. The benchmark rate has remained at 4.35% for 10 consecutive meetings, and with inflation easing, the RBA is now positioned to begin a rate-cutting cycle.

Despite expectations of a cut, AUDUSD has risen for two consecutive weeks after bottoming at 0.60875, its lowest level since April 2020. While the pair has gained, it still trades near five-year lows, leaving room for further upside despite the anticipated rate reduction.

Key Technical Levels to Watch

  • Support Levels:

    • 0.6334 – Staying above this level keeps the short-term bullish bias intact and could allow buyers to push higher.
    • 0.6287–0.6301 – If the price breaks below 0.6334 but finds support here, buyers remain in play. However, a deeper drop could strengthen sellers' control.
    • Below 0.6287 – Expect increased downside momentum if this level is breached.

  • Resistance Levels:

    • 0.64139 (38.2% retracement) – A break above this level could shift focus toward higher targets.
    • 0.64419 (100-day moving average) – This is a major bullish trigger, as AUDUSD has not traded above its 100-day MA since October 2024. A sustained move above would reinforce bullish sentiment from a technical standpoint.

Traders will be closely watching whether buyers can maintain control above key support levels to sustain the recent upside momentum or if sellers take advantage of a dovish RBA decision to push AUDUSD lower.

Source: Forex Live