- The RBA kept rates on hold on Tuesday and reiterated its commitment to reducing stubborn inflation.
- The probability of an RBA cut in December increased slightly to 72%.
- PMI data in the previous session revealed steady business activity.
The AUD/USD outlook shows a tumultuous reaction to the Reserve Bank of Australia’s policy meeting. The Australian dollar oscillated after the RBA’s policy meeting, as policymakers remained determined to tame inflation.
–Are you interested in learning more about buying NFT tokens? Check out our detailed guide-
The RBA kept rates on hold on Tuesday and reiterated its commitment to reducing stubborn inflation. Due to high inflation, policymakers remained cautious for most of this year. At 3.9%, Governor Michelle Bullock noted that core inflation remains too high. Therefore, further rate increases are still possible.
The Australian dollar jumped immediately after the meeting before the collapse. The move showed uncertainty among market participants about the prospect of a rate cut. After the meeting, the probability of a cut in December rose slightly to 72%.
Meanwhile, the US dollar remained steady after PMI data revealed steady business activity in the previous session. At the same time, it indicated an increase in prices, which could lead to higher inflation in the future. The report comes after the Federal Reserve cut borrowing costs by 50 basis points. Higher inflation could reduce the likelihood of another big rate cut in November. At the moment, market participants estimate an almost 50% chance of such an outcome. However, things could change as more data comes in.
Market focus will now shift to GDP and core PCE figures. GDP will show the state of the economy, which performed better than expected. Meanwhile, core PCE is an important measure of inflation for the Fed. Therefore, it will affect the expectations of future political moves.
AUD/USD key events today
- Consumer Confidence USA CB
Technical Outlook AUD/USD: Volatile bullish price action
On the technical side, the AUD/USD price is in a bullish trend above the 30-SMA. At the same time, the RSI is trading above 50 in bullish territory. The price recently broke above the 0.6800 resistance level. However, the move above the key level was weak. The price has risen sharply, indicating exhaustion.
-Are you looking for the best CFD broker? Check out our detailed guide-
At the same time, the RSI made a bearish divergence, a sign that the bullish momentum is fading. Therefore, it could pull back to retest the 30-SMA. Furthermore, it could break below the SMA and the 0.6800 level to reverse the trend.
Do you want to trade Forex now? Invest in eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
