Market Insights > Daily Market Analysis

12 August 2025,03:12

Daily Market Analysis

Aussie Dollar Holds Ahead of RBA Rate Decision

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12 August 2025, 03:12

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Key Takeaways:

*Australian Dollar steady as supportive trade outlook offsets dovish RBA expectations.

*RBA set to cut rates by 25bps; tone from Governor Bullock seen as key driver for AUD/USD direction.

*Commodity demand signals from China and global risk sentiment remain critical near-term catalysts.

Market Summary:

The Australian Dollar hovered near $0.6525, with traders balancing a supportive trade backdrop against a dovish domestic policy outlook. Externally, sentiment has been lifted by the 90-day extension of the U.S.–China tariff truce, easing concerns over disruptions to Australia’s largest export market. A sharp increase in Chinese rare-earth shipments to the U.S. has further bolstered the commodity demand outlook, while stable iron ore prices continue to underpin the currency. Improved global risk appetite helped by tentative geopolitical de-escalation in the Middle East has also encouraged flows into risk-sensitive currencies like the AUD.

Domestically, focus is firmly on today’s Reserve Bank of Australia meeting, where a 25bps cut to 3.6% is fully priced in. Traders are watching Governor Michele Bullock’s tone for clues on whether this is a one-off adjustment or the start of a deeper easing cycle. A hawkish-leaning stance could see AUD/USD test resistance at $0.6600, while dovish rhetoric may pull the pair toward $0.6450. The broader outlook is complicated by gold price volatility which can influence Australia’s terms of trade and mixed Chinese economic data that continue to highlight a patchy recovery.

Additional headwinds may come from domestic data softness, with recent building approvals and retail sales showing signs of strain, pointing to slower household spending under high debt burdens. Conversely, any upside surprises from China’s upcoming trade balance or industrial output figures could provide a near-term tailwind. Near-term moves will be dictated by the interplay between RBA guidance, China’s demand signals, and shifts in global risk sentiment.

Technical Analysis

AUDUSD, H4

AUD/USD is holding near the 0.6530 level, last seen trading around 0.6520 after rebounding from the 0.6415 support zone earlier this month. The pair remains within a broader ascending channel that has guided price action since late May, with the mid-channel area now acting as a key pivot. The upside focus is on whether bulls can secure a decisive break above the 0.6530 resistance area, which would expose the upper boundary of the channel near 0.6644. A failure to clear this zone may trigger renewed pressure toward 0.6485 and 0.6415, with a drop below the latter potentially shifting the medium-term bias bearish toward 0.6325.

Momentum indicators are moderately constructive. The Relative Strength Index (RSI) sits at 56, maintaining a gentle upward slope without approaching overbought territory, indicating room for further gains. The MACD remains in positive territory, though the histogram is flattening, suggesting that bullish momentum is present but not accelerating sharply.

Overall, the short-term technical structure for AUD/USD leans cautiously bullish while price holds above 0.6485, with a breakout above 0.6530 needed to reassert upside momentum toward 0.6644. A daily close below 0.6415 would negate this constructive bias and signal a deeper corrective phase.

Resistance Levels: 0.6530, 0.6644

Support Levels: 0.6415, 0.6325

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Disclaimer

This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.

This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.

PU Prime makes no representation as to the accuracy or completeness of this content and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.

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