The Australian Dollar (AUD) slipped against the US Dollar (USD) on Monday, pausing a four-day winning streak as the Greenback stabilized ahead of key central-bank events. At the time of writing, AUD/USD trades near 0.6621, with markets turning cautious ahead of Tuesday’s Reserve Bank of Australia (RBA) policy announcement.
RBA decision in focus amid steady expectations
Markets broadly expect the RBA to keep interest rates unchanged at 3.60%, following consecutive holds in September and November after three rate cuts earlier this year. With the outcome fully priced in, traders are shifting their attention to the central bank’s forward guidance. Growing speculation suggests policymakers may lean toward a tightening bias heading into 2026 if domestic conditions remain resilient.
Fed rate cut expectations shape near-term bias
Investors are also positioning for Wednesday’s Federal Reserve (Fed) rate decision, where a 25-basis-point cut is widely anticipated. The divergence between RBA steadiness and a potentially more accommodative Fed keeps the near-term outlook tilted in favor of AUD/USD upside – particularly if the RBA delivers a hawkish hold.
Technical outlook: bullish structure holds above 0.6600
From a technical standpoint, AUD/USD retains a constructive bias after cleanly breaking above the 0.6600 psychological level, which now acts as immediate support. Holding above this threshold maintains bullish momentum and keeps the path open for a retest of this year’s peak at 0.6707 – the September 17 high, marking both the year-to-date top and the strongest level since October 2024.
A decisive move above 0.6707 would expose the next key upside target at the psychological 0.6800 handle if momentum continues to build.
On the downside, a daily close back below 0.6600 would weaken the near-term bullish setup and shift focus toward support at 0.6540–0.6530, where the 21-day and 100-day Simple Moving Averages (SMAs) converge. A deeper pullback could extend toward the 0.6450 region.
Momentum indicators support the bullish case
Momentum signals remain constructive. The Moving Average Convergence Divergence (MACD) line is advancing in positive territory, indicating strengthening bullish momentum. Meanwhile, the Relative Strength Index (RSI) hovers near 65, maintaining an upward bias without tipping into overbought territory.
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