After the rate cut, the AUDUSD dropped initially but quickly recovered and tested last week’s high.

    by VT Markets
    /
    Aug 12, 2025
    The AUDUSD currency pair initially dropped after the Reserve Bank of Australia’s rate decision, falling below the 200-hour moving average at 0.6487. However, this decline reversed when buyers stepped in, lifting the pair higher. Following the US Consumer Price Index (CPI) report, volatility pushed the pair up to the 100-hour moving average at 0.65138, where it faced temporary resistance, causing a brief retreat to 0.6490. This pullback didn’t last long, as buyers regained control, moved past the 100-hour moving average, and increased the pair’s value due to selling pressure on the US dollar.

    Potential Bullish Outlook

    The upward surge brought the AUDUSD close to last week’s high of 0.6541, peaking at 0.65392 today. The next resistance level to watch is at 0.65455, which aligns with the 61.8% retracement from the decline on July 24. If this level is breached, it may confirm a bullish trend and lead to further price movements toward other retracement areas. Key Technical Levels are: – Resistance: 0.6541 and 0.65455 – Support: 0.6521, 0.65138, and 0.6487 If the price remains above 0.65138, it suggests a bullish trend, possibly reaching for 0.65455. On the other hand, a drop below 0.65138 could push sellers back to the 200-hour moving average at 0.6487. We observed a quick recovery in the AUD/USD after this month’s rate cut by the Reserve Bank of Australia. The dip below the 200-hour moving average showed strong buying interest, and now the pair is testing last week’s highs against key resistance.

    US Dollar Influence

    The main factor driving this movement appears to be the weakness of the US dollar after the latest Consumer Price Index report. July’s inflation rate was 2.9%, which was lower than expected, suggesting that the Federal Reserve might pause its rate hikes. This expectation is reflected in Fed fund futures, showing less likelihood of a rate increase in September. On the other hand, the Australian dollar is supported by solid fundamentals, despite the RBA’s recent decision. The July jobs report revealed an unemployment rate of 3.9%, above expectations and indicating economic strength. Additionally, rising iron ore prices, now over $110 per tonne due to renewed demand from China, are also helping the AUD. For traders dealing in derivatives, attention in the upcoming weeks should focus on the 0.65455 level. If the price remains above this level, it could signal a good opportunity to buy call options, indicating the start of a new bullish trend. This would target higher resistance zones not seen since late July. Conversely, if the pair fails to surpass 0.65455 and drops below 0.65138, it may suggest that buying momentum is weakening. In this case, traders might consider buying put options to protect against a price drop back toward the 200-hour moving average around 0.6487. Expect continued volatility, so it’s important to manage risk around these key technical levels. Create your live VT Markets account and start trading now.

    here to set up a live account on VT Markets now

    see more

    Back To Top
    Chatbots