AUDUSD is close to session lows, with a narrow range of 34 pips, as traders anticipate the Reserve Bank of Australia’s rate decision. The RBA will likely reduce rates by 25 basis points to 3.60%, following earlier cuts this year. Previously, the central bank maintained rates, focusing on timing.
Market consensus supports the rate cut, as a Reuters poll showed complete agreement for this action. Influences include reduced inflation and weaker job data; CPI has moved towards the lower end of the RBA’s target, with Q2 headline inflation at 2.1% year-on-year. June job growth added only 2,000 positions, falling short of the expected 20,000, the weakest increase since October 2024, and the unemployment rate increased to 4.3% from 4.1%.
Technical Analysis of Aud Usd
Technically, AUDUSD is below the 200-bar and 100-bar moving averages on the 4-hour chart. These averages, positioned above the midpoint of a range from 0.63546 to 0.6625, influence trading bias. Breaking below the 0.6489 midpoint may lead to further declines, considering weak domestic data and the expected rate cut. Nonetheless, adjustments in U.S. rate expectations may mitigate the impact, suggesting a range-bound scenario where moving averages guide trading strategies.
As we look back, the Reserve Bank of Australia did indeed cut its key interest rate to 3.60% at its meeting last week, a move that was widely expected by the market. This decision was a direct response to the softer Q2 inflation data, which fell to 2.1%, and the disappointingly weak June jobs report that added only 2,000 positions. Because the cut was fully priced in, the immediate market reaction was subdued.
The AUDUSD pair continues to consolidate in the wake of the RBA’s decision, finding itself caught in a tight range. We remain below the key 100-bar and 200-bar moving averages on the 4-hour chart, at 0.6513 and 0.6528 respectively, which keeps the immediate pressure on sellers. The crucial midpoint of the larger range, 0.6489, is acting as a pivot point for short-term price action.
Factors Influencing Future Movements
A significant factor preventing a sharper fall in the Aussie dollar is the shifting expectation for U.S. interest rates. The most recent U.S. jobs report for July, released on August 1st, 2025, showed job growth slowing more than anticipated and wage pressures easing, bolstering the case for the Federal Reserve to pause its own rate hikes. This dynamic is capping US dollar strength and creating a floor for the AUDUSD.
For derivative traders, this environment of competing fundamental pressures suggests continued range-bound activity in the weeks ahead. With the pair caught between a dovish RBA and a potentially dovish Fed, selling volatility through strategies like an iron condor or a short strangle could be advantageous. These positions would profit if the AUDUSD remains within the broader 0.6350 to 0.6625 support and resistance levels.
Looking forward, the next major test will be Australia’s July employment figures, scheduled for release later this week. Another soft number could see the pair break below the 0.6489 midpoint and test the swing area near 0.6451. Conversely, any surprisingly strong data could push the price to challenge the moving average resistance overhead.
