Australian Dollar Hits Four-Week Low Amid RBA Stance and US Dollar Strength :: InvestMacro

By RoboForex Analytical Department 

The AUD/USD pair continues its downward trajectory, reaching a four-week low of 0.6386 on Wednesday. This decline is primarily influenced by the Reserve Bank of Australia’s (RBA) decision to maintain interest rates at 4.35% per annum for the ninth consecutive meeting. This decision, which was widely expected, reflects the central bank’s cautious approach despite ongoing inflation concerns.

RBA Governor Michelle Bullock emphasised that the central bank’s current stance on inflation is deliberate, aiming to signal responsiveness to softening economic indicators. The market currently anticipates a high likelihood of an RBA rate cut in February, with a 63% probability of a 25-basis-point reduction. Expectations are set for further cuts at subsequent meetings through May as investors and analysts factor in potential easing measures.

AUD supporters’ focus is shifting towards Thursday’s release of Australian employment data, which could provide further clues about the economic outlook and influence RBA policy decisions.

The Australian dollar is also experiencing significant pressure from a strengthening US dollar, which adds to its challenges.

Technical analysis of AUD/USD

H4 chart: the AUD/USD is navigating a wide consolidation range centred around 0.6450. The pair is currently forming a downward movement towards 0.6347. Upon reaching this level, a corrective rise to 0.6450 is expected, potentially testing this resistance from below before possibly initiating a new decline towards 0.6215. This bearish outlook is supported by the MACD indicator, whose signal line is below zero and continues to trend downwards.

H1 chart: the market is actively developing a downward wave towards 0.6347. After hitting this target, a corrective movement towards 0.6450 could occur. The Stochastic oscillator, with its signal line below 50 and moving towards 20, confirms this scenario, indicating the potential for further downward pressure before any corrective rebound.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.