Key Points
- AUDUSD traded near 0.7044, down 0.36%, after the RBA held its cash rate at 4.35%.
- The central bank warned that further tightening may still be needed to control inflation.
- Traders are watching 0.7058 resistance and 0.7044 support as the next short-term range.
AUDUSD slipped on Tuesday after the Reserve Bank of Australia held interest rates steady at 4.35%, in line with market expectations.
The Aussie dollar traded around 0.7050, down 0.3%, after gaining nearly 0.5% on Monday as Middle East peace hopes lifted broader risk sentiment. The pullback suggests traders had already priced in the RBA hold and are now focused on whether the central bank may raise rates again later this year.
The RBA has lifted rates three times this year from 3.60% as it tries to contain stubborn inflation. While the board acknowledged weaker consumer demand, tighter financial conditions, and a cooler housing market, it also warned that inflation remains too high.
Why Traders Are Watching This
Traders are watching AUDUSD because the RBA has kept its tightening bias alive.
Markets now imply around a 30% chance of a hike at the next RBA meeting in August. They also price around a 60% chance that rates will rise one final time to a peak of 4.60%.
That gives AUDUSD a mixed setup. A steady RBA decision limits immediate upside, but the warning on inflation may prevent a deeper sell-off if traders keep pricing in another hike.
The broader macro backdrop also remains important. Peace-deal optimism in the Middle East has supported risk currencies, but AUDUSD is now testing whether that optimism can offset local growth and housing concerns.
Key Trading Levels
| Level | What Traders Are Watching |
| 0.72 | Wider upside resistance |
| 0.7089 | Recent swing high and recovery level |
| 0.7075 | Intraday high |
| 0.7058 | 20-period moving average resistance |
| 0.7054 | 10-period moving average |
| 0.705 | 5-period moving average |
| 0.7044 | Current trade zone and intraday low |
| 0.6979 | Recent two-month low and key downside support |
AUDUSD is trading below its short-term moving averages, with the 5-period MA at 0.70502, the 10-period MA at 0.70535, and the 20-period MA at 0.70579.
That keeps the short-term bias tilted lower. The pair has moved down from the 0.7089 area and is now testing the lower end of the chart near 0.7044.
A move back above 0.7058 would suggest the pair is stabilising. A stronger recovery would need price to reclaim 0.7075. On the downside, a break below 0.7044 could bring 0.7000 and 0.6979 into focus.
Bullish and Bearish Setups
| Setup | Trigger | Potential Market Reaction |
| Bullish Recovery | Move above 0.7058 | Buyers may target 0.7075 |
| Breakout Setup | Move above 0.7089 | Momentum may extend toward 0.7200 |
| Pullback Setup | Hold above 0.7044 | Traders may watch for short-term stabilisation |
| Bearish Break | Move below 0.7044 | Sellers may target 0.7000, then 0.6979 |
The bullish setup depends on AUDUSD reclaiming 0.7058 and holding above the 20-period moving average. That would suggest buyers are returning after the RBA-led pullback.
The stronger breakout setup needs a move above 0.7089. If buyers clear that area, traders may look toward 0.7200 as the next larger resistance zone.
The bearish setup builds if AUDUSD breaks below 0.7044. A move under that level would show that sellers remain in control and may push the pair toward the psychological 0.7000 level.
Disclaimer
The price levels and trade scenarios above reflect the author’s view at the time of writing and do not represent financial advice or an official recommendation from VT Markets. Traders should conduct their own analysis and manage risk carefully.
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What To Watch Next
Traders should watch 0.7058 resistance and 0.7044 support.
A break above 0.7058 could support a recovery toward 0.7075. A move below 0.7044 would keep sellers in control and shift focus toward 0.7000.
Beyond the chart, the next drivers are RBA rate expectations, Australian inflation data, labour market signals, bond yields, and whether global risk sentiment stays supported by Middle East peace hopes.
FAQs
Why Is AUDUSD Falling Today?
AUDUSD is falling after the RBA held rates steady at 4.35%. Traders are also weighing slower domestic demand, a cooler housing market, and the chance that another rate hike may still come later this year.
What Is the Key Level to Watch for AUDUSD?
The key upside level is 0.7058, which marks the 20-period moving average. A move above this area could support a recovery toward 0.7075. On the downside, 0.7044 is the first key support level.
Can AUDUSD Recover?
AUDUSD could recover if buyers defend 0.7044 and push price back above 0.7058. A stronger rebound would need a move above 0.7089.
What Could Push AUDUSD Lower?
AUDUSD could move lower if Australian data weakens further, risk sentiment fades, or the US dollar strengthens. A break below 0.7044 would increase downside pressure and bring 0.7000 into focus.
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Yes. VT Markets offers access to AUDUSD CFDs, allowing traders to take a view on rising or falling Australian dollar moves without owning the underlying currencies. Traders can also access forex, gold, oil, indices, shares, ETFs, and other CFD markets from one platform.
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