AUD/USD gains modestly after RBA leaves interest rates unchanged

The Reserve Bank of Australia (RBA) kept its benchmark interest rate steady at 4.35% amid persistent inflation risks. Consequently, the AUD/USD pair gained modestly, maintaining its broader bullish technical trajectory ahead of crucial upcoming US inflation data.

By Daniel Mejía

The Reserve Bank of Australia unanimously voted to leave its benchmark interest rate unchanged at 4.35%.
Australian headline inflation stood at 3.80% in June, remaining above the central bank’s 2%–3% target band.
The AUD/USD pair appreciated slightly to $0.7059 as market participants await key US inflation data.

AUD/USD advances slightly as RBA maintains interest rates steady

The Reserve Bank of Australia (RBA) decided to leave its benchmark interest rate unchanged at 4.35% during its monetary policy meeting, aligning with analyst expectations. The decision was unanimous. Members of the RBA Board signalled that inflationary pressures persist, partly driven by the ongoing US-Iran conflict in the Middle East, even as the Australian economy continues to exhibit structural resilience.

While the Australian unemployment rate increased to 4.40% in June—reflecting an upward trend over the past three years—it has remained relatively stable over the last twelve months. Meanwhile, year-on-year inflation stood at 3.80% in June; although down from its peak of 4.6% in March, it remains notably above the RBA’s target band of 2%–3%. Additionally, a deceleration in consumer spending growth has eased pressure on the central bank from the aggregate demand side.

Following the monetary policy announcement, the Australian dollar appreciated marginally by 0.08% against the US dollar to $0.7059. This constrained movement reflects market caution ahead of key US inflation data scheduled for release on Wednesday, 12 August. From a technical perspective, the AUD/USD pair remains within a bullish trajectory, underpinned by the interest rate differential as both economies have demonstrated macroeconomic stability over recent quarters.

Figure 1. Australia Interest Rate (2021–2026). Source: Data from the Reserve Bank of Australia; Figure obtained from Trading Economics.

Technical analysis of the AUD/USD pair

From a technical perspective, the AUD/USD pair continues to trade within an established bullish trajectory. Key technical observations include:

Trend Context: The AUD/USD pair maintains a long-term bullish structure, defined by a consistent sequence of higher highs and higher lows. Price action remaining above the 50, 100, and 200-day Simple Moving Averages (SMAs) reinforces this underlying upward trajectory.
Resistance Levels: Should the pair sustain its upward momentum, immediate resistance is located at 0.7169, with the next major technical hurdle residing at the structural resistance ceiling of 0.7260. A decisive daily close above this pivot point would suggest renewed bullish momentum targeting higher valuation zones.
Support Levels: If short-term support at 0.6926—a level that converges with the 200-day SMA—is breached to the downside, the next key demand zone is found at 0.6843. A decisive breakdown below 0.6843 would significantly increase the probability of a deeper market correction.
Momentum Indicators: Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) display ascending trajectories, indicating that short-term bullish momentum could persist. Nevertheless, macroeconomic developments are expected to remain the primary drivers of near-term price action.