The AUD/USD currency pair remained steady above the 0.7200 level during the Asian session on Tuesday, consolidating gains after reaching its highest point since May 14 in the previous session [1]. The pair's resilience is attributed to expectations of another interest rate hike by the Reserve Bank of Australia (RBA) later this month, which continues to support the Australian Dollar (AUD) [1]. In contrast, the US Dollar (USD) has experienced follow-through selling, partly due to a broadly rallying Japanese Yen (JPY), further boosting the AUD/USD pair [1].
From a technical standpoint, the recent close above 0.7200 follows a strong rally from the 200-day Simple Moving Average (SMA), which was tested in June, reinforcing a constructive near-term outlook for the pair [1]. Momentum indicators such as the Relative Strength Index (RSI) remain in bullish territory, just below overbought levels, and the Moving Average Convergence Divergence (MACD) line maintains a small positive spread, signaling continued upside pressure [1]. However, the analysis notes that this bullish momentum is becoming mature, suggesting that any corrective pullback toward the immediate support at 0.7145 is likely to be limited and could attract buyers [1]. A decisive break below this level might trigger technical selling, potentially dragging the pair below 0.7100, with the 200-day SMA at 0.6992 serving as a key medium-term support [1].
On the upside, the next significant resistance is the multi-year peak at 0.7272, and a daily close above this level could pave the way for further gains [1]. Market participants are currently cautious, awaiting the release of the latest US inflation figures later in the week, which could influence the pair's direction [1].
In terms of broader currency movements, the US Dollar has weakened by 0.25% against the AUD this week, while showing its strongest performance against the New Zealand Dollar (NZD), up 0.31% [1].
CONCLUSION
The AUD/USD pair is consolidating above 0.7200, supported by expectations of an RBA rate hike and technical momentum. While the outlook remains bullish, traders are cautious ahead of upcoming US inflation data, with key resistance at 0.7272 and support at 0.7145 and 0.6992. The market's focus will likely shift based on the inflation figures and any signals from the RBA.