- Outlook AUD / USD shows a sharp leap in the Australian dollar.
- The Australian Reserve Bank of Stunned Markets by holding interest rates unchanged.
- Trump sent tariff letters to some major US trading partners.
Outlook AUD / USD shows a sharp leap in the Australian dollar after surprise break by RBA. In the meantime, market participants remain cautious after Trump sent letters, increasing tariffs in 14 countries.
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The Australian Reserve Bank preserves markets by maintaining interest rates unchanged on Tuesday. Economists and market participants have almost fully expected to reduce the rate of 25 BPS. However, policy makers said they needed more time to assess the condition of inflation before cutting rate. As a result, traders price prices 88% chance of the incision in August.
All signs indicated a course reduction this week. The economy was weak, and inflation eased significantly. If this trend continues, the Central Bank is likely to reduce during its next meeting.
By the way, Trump sent tariff letters to some of the main American trading partners, including Japan. This move has increased concern over the higher global tariffs, which will further harm the global economy. At the same time, these tariffs may deter a slowdown in the American economy, encouraging feeding reduction in lower borrowing costs. However, the reaction was currently muted.
AUD / USD Key events Today
Merchants do not expect key issues from Australia or the US. Therefore, the decision of RBA will continue to vary.
AUD / USD TECHNICAL OUTLOOK: Bulls reappear to cause SMA
On the technical side, the price of AUD / USD suddenly bounced backwards to reset 30 SMA resistance. Initially, the sudden fall briefly pushed the price below the solid support zone containing the FIB level of 0.382 and a psychological level of 0.6500. However, the bears were not strong enough to endure that move. As a result, the price rose above the zone and now tightened SMA.
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Meanwhile, the RSI violated over 50 years, on the territory of Bikala. If the bulls maintain their swing, the price will probably break above the SMA. Such a move would point to a change in feeling. Moreover, it would allow the AUD / USD to reset the resilience level at 0.6590.
However, if the SMA has a company, the bears will stay in lead. Therefore, sales are likely to withdraw the support zone. The lower low would strengthen the bear bias.
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