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Published: 11 August 2026,10:40
Daily Market Analysis New
Key Takeaways:
*The RBA is widely expected to keep the cash rate unchanged at 4.35%. Market attention will be on the policy statement, economic forecasts, and Governor Bullock’s comments for clues on future policy direction.
*The Australian dollar has largely followed broader risk sentiment and U.S. dollar movements in recent sessions, with limited domestic drivers supporting the currency.
*A more neutral or dovish tone could weigh on the Aussie by reinforcing expectations that the tightening cycle has ended. Conversely, a hawkish stance highlighting persistent inflation risks may provide support and help the currency strengthen.
The Australian dollar faces a key test today as the Reserve Bank of Australia (RBA) announces its interest rate decision. Markets widely expect the central bank to hold the cash rate unchanged at 4.35%, following three earlier hikes this year. A steady policy outcome is largely priced in, meaning the accompanying statement, updated economic forecasts, and Governor Michele Bullock’s press conference will carry greater weight in determining the currency’s near-term direction.
The Aussie has lacked a strong independent catalyst in recent sessions and has largely tracked broader risk sentiment and movements in the U.S. dollar. While it has shown periods of relative resilience—supported at times by commodity prices and softer U.S. data—the absence of fresh domestic drivers has left it vulnerable to shifts in interest rate differentials. A straightforward hold that signals greater confidence that previous tightening is sufficient, or that downplays the need for further action, could reinforce the view that the RBA’s hiking cycle has peaked. Such an outcome may place additional pressure on the Australian dollar, particularly if it coincides with any recovery in the greenback.
Conversely, if the RBA maintains a clearly hawkish tone, emphasising persistent inflation risks or retaining an explicit tightening bias, the currency could find support and limit downside. Updated forecasts for inflation, growth, and unemployment will be closely scrutinised for clues on the policy outlook. Overall, with the rate decision itself expected to deliver limited surprise, the Australian dollar’s path will hinge on the nuance of the RBA’s communication and its implications for relative yields against other major currencies.
Technical Analysis
The AUD/USD pair has broken above its previous downtrend channel, signaling a potential shift in market sentiment and suggesting that the recent bearish phase may have come to an end. Following the breakout, the pair has continued to trade in a higher-low price pattern, reinforcing the bullish technical structure and indicating that buyers are gradually gaining control of the market.
Despite the positive technical developments, the pair is approaching a significant resistance zone near 0.7130, which coincides with the 61.8% Fibonacci Retracement level. This area is expected to act as a major hurdle for the bulls and could attract profit-taking or renewed selling pressure.
As a result, AUD/USD may face increased volatility as it approaches this resistance level. A decisive breakout above 0.7130 would further strengthen the bullish case and signal that the recovery has room to extend. Such a move would confirm the breakout from the downtrend channel and reinforce the broader trend reversal narrative.
However, failure to overcome the 0.7130 resistance zone could trigger a period of consolidation or a short-term pullback, as traders reassess the sustainability of the recent rally.
Resistance Levels: 0.7130, 0.7270
Support Levels: 0.6980, 0.6840
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