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AUD/USD Forecast: Bullish Bias Above 0.6590 Ahead of RBA Decision
The AUD/USD pair remained stable in Monday’s early trading, hovering near 0.6550 — just below its year-to-date high of 0.6590 — as markets brace for the Reserve Bank of Australia’s (RBA) next interest rate decision. With the pair already up nearly 10% from this year’s lows, all eyes are on the RBA’s policy direction.
RBA Policy Expectations
The RBA wraps up its two-day meeting on Tuesday. Economists are split on the outcome, with some anticipating steady rates while others expect a cut in response to recent economic data. Inflation in Australia slowed to 2.2% in May, the lowest level in over three years, while core inflation — measured by the trimmed mean — remains within the RBA’s 2–3% target band.
Given this trend, the central bank could deliver a third consecutive rate cut, potentially lowering the cash rate to 3.85%. Falling bond yields this year suggest the market is already leaning toward this possibility.
Beyond domestic policy, traders are also monitoring geopolitical developments, particularly U.S. trade actions under former President Trump, which could influence broader market sentiment.
AUD/USD Technical Analysis
The daily chart shows a sustained bullish trend since April, with the pair rising from 0.5915 to a high of 0.6590. An ascending channel has formed, and the price is currently trading just below the upper boundary.
Importantly, AUD/USD remains above the 50-day and 100-day moving averages and above the 50% Fibonacci retracement level (0.6428). A breakout above 0.6590 could confirm a continuation toward the next psychological resistance at 0.6700.
Trade Setup
- Bullish View: Buy AUD/USD if price breaks above 0.6590. Target 0.6700. Stop-loss: 0.6450.
- Bearish View: Sell AUD/USD if it rejects 0.6590 again. Target 0.6450. Stop-loss: 0.6700.
- Timeline: 1–2 days
Conclusion
Traders are advised to watch for a breakout above 0.6590 as confirmation of continued bullish momentum. A dovish surprise from the RBA may temporarily pressure the Aussie, but overall technicals favor the bulls — especially if U.S. dollar weakness persists.