Alex Bobrov
⬤ AUD rallied during the European session after the Reserve Bank of Australia delivered a rate hike, giving the Aussie a solid boost against the greenback. The pair bounced hard from earlier lows and is now comfortably sitting above the 0.6960-0.6965 zone - a level that's been holding as important technical support. The policy move gave the Australian dollar the momentum it needed to keep climbing.
⬤ RBA Governor Michele Bullock stayed flexible on what's coming next for rates, not locking in any specific path forward. But she made it crystal clear that inflation's still the main concern. "Price stability remains a priority," she emphasized, backing the hike with signs of decent economic activity and a labor market that's holding up well. That's been giving the Aussie real staying power.
⬤ Looking at the chart, AUD is trading comfortably above support near 0.6960-0.6965 and testing the 0.7030 handle. That level's acting as the near-term pivot now, with the next upside target sitting between 0.7075 and 0.7095. Price action's above key moving averages, showing the rebound's improved short-term technicals - assuming the US dollar cooperates and doesn't stage a comeback.
⬤ This matters because the Aussie's one of the higher-yielding currencies in the G10 space. Mix hawkish inflation talk with solid domestic fundamentals, and AUD/USD can hold firm even if gains against the dollar stay choppy. If greenback strength caps the upside here, watch for the Aussie to outperform through the crosses - that's where the real action could unfold in the FX market.
Alex Bobrov
