The Australian dollar is underpinned by expectations that the Reserve Bank of Australia will cut the cash rate by 25 bps to 3.60% at tomorrow’s 06:30 (GMT+2) decision. A easing in trade uncertainty also helps: last week, a baseline tariff of 10.0% for most goods shipped to the U.S. was flagged, a change domestic businesses have already had time to absorb. Recent labor market and inflation releases have cooled more than the RBA had forecast, adding another argument for a cut. Looking ahead, ANZ Group expects tomorrow’s move to be followed by another reduction in November, after which the RBA could pause briefly and resume a dovish cycle in the spring.

On Wednesday at 03:30 (GMT+2), July labor data are due: unemployment is seen steady at 4.3%, total employment up 21.5k, and full-time employment up 15.0k—signals of resilience despite ongoing trade tensions.

The U.S. dollar index (USDX) is hovering near last week’s close at 97.90 amid comments from President Donald Trump. According to new reports, he expanded the shortlist for the next Fed Chair from four to ten candidates, potentially prolonging the selection process and reducing the odds of current Chair Jerome Powell’s dismissal. July CPI lands tomorrow at 14:30 (GMT+2); core inflation is expected at 3.0%, well above the 2.0% target.

Support and resistance

On the daily chart, the pair is correcting away from the support line of the ascending channel with dynamic boundaries at 0.6670–0.6420.

Technical signals are softening on the sell side and could flip: the fast EMAs within the Alligator indicator are turning higher toward the signal line, while the Awesome Oscillator has printed several rising bars in negative territory.

Resistance: 0.6570, 0.6670.

Support: 0.6460, 0.6360.

Trading scenarios

Long setup: Consider buys after a rise and sustained hold above 0.6570, aiming for 0.6670. Stop-loss at 0.6500. Holding period: 7+ days.

Short setup: Consider sells after a drop and sustained hold below 0.6460, targeting 0.6360. Stop-loss at 0.6530.

AUD/USD is retracing higher

Scenario (weekly)

  • Recommendation: BUY STOP

  • Entry: 0.6570

  • Take Profit: 0.6670

  • Stop Loss: 0.6500

  • Key levels: 0.6360, 0.6460, 0.6570, 0.6670

Alternative scenario

  • Recommendation: SELL STOP

  • Entry: 0.6460

  • Take Profit: 0.6360

  • Stop Loss: 0.6530

  • Key levels: 0.6360, 0.6460, 0.6570, 0.6670