AUD/USD Price Analysis: RBA Hawkish Stance Lifts AUD Amid U.S.-China Trade Risks
The Australian Dollar (AUD) got a boost after the Reserve Bank of Australia’s (RBA) November meeting minutes.
The RBA left interest rates on hold at 4.35% and said current settings are already restrictive. RBA Governor Michele Bullock said they will keep this policy in place until inflation forecasts meet targets.
Locally, the labour market was steady. Unemployment was 4.1% in October, as expected, and employment rose 15.9K. But that was below the 25.0K expected, so job growth is moderate. Consumer inflation expectations fell to 3.8% in November, the lowest since October 2021, so prices are easing in the economy.
U.S.-China Trade Tensions Weigh on AUD Outlook
The AUD is facing headwinds due to U.S.-China trade tensions. Former President Donald Trump has proposed tariffs of up to 60% on Chinese imports to protect U.S. industries. That’s a risk for Australia as China is its largest trading partner.
China’s recent data was mixed. Retail sales beat expectations, up 4.8% year on year in October vs 3.8% expected. But industrial production was below, 5.3% vs 5.6% expected. That’s the complexity of the relationship between Australian exports and Chinese economic performance and will weigh on the AUD.
AUD/USD Technical Analysis
AUD/USD is trading at $0.64979, up 0.14%, consolidating near its pivot point at $0.64941 on the 2-hour chart. Immediate resistance is at $0.65113, followed by $0.65387 and $0.65660. On the downside, immediate support is seen at $0.64756, with further levels at $0.64476 and $0.64207.
The RSI at 57.46 reflects mild bullish momentum, while the 50-day EMA at $0.64914 offers dynamic support. A breakout above $0.65113 could push prices toward $0.65387, while failure to sustain above the pivot risks bearish movement toward $0.64756.
Key Takeaways
- RBA Policy: Rates held at 4.35%; hawkish tone supports AUD.
- U.S.-China Tensions: Proposed tariffs pose risks to Australian exports.
- Technical Levels: Resistance at $0.65113; support at $0.64756.
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