The RBA is widely expected to raise interest rates by 0.25% at Tuesday’s meeting. This will be the second consecutive increase of 0.25%. How market participants will react to it, while the Fed and other major world central banks continue to move with more confident steps in the cycle of tightening their monetary policies, is not difficult to guess. AUD is unlikely to strengthen much after such a decision by the RBA. Although, a lot will also depend on the accompanying statements of the bank’s management. Tough rhetoric of their statements regarding future RBA interest rate hikes may support the Australian dollar. In general, the overall global downtrend of the pair is still in force.
Given the overall downward momentum in AUD/USD, we can expect further declines deeper into the descending channels on the daily and weekly charts.
In an alternative scenario, AUD/USD will once again attempt to break into the zone above the resistance level 0.6466.
Support levels: 0.6420, 0.6382, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510
Resistance levels: 0.6455, 0.6466, 0.6500, 0.6545