Australian dollar outlook as markets prepare for upcoming RBA rate decision

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The Australian Dollar is coming off several weeks of strength, buoyed by broad market optimism and fading tariff concerns that have lifted global growth sentiment—typically a supportive backdrop for the AUD and other commodity-linked currencies.

Australia’s economy remains resilient, with the unemployment rate holding near 4.1%. However, the Reserve Bank of Australia (RBA) expects the number to gradually rise toward year-end, adding to the case for further monetary easing.

With that in mind, markets widely expect a 25 bps rate cut at the upcoming RBA meeting (Current 3.85% expected to get to 3.60%). While this move is largely priced in, surprises remain possible, especially as inflation—though easing—may be reignited by Trump’s tariffs on Chinese goods, which could spill over into Australia through trade channels.

AUD moves aren’t purely driven by domestic factors. Keep an eye on the US Dollar, which is rebounding to start the week, as well as China’s economic trajectory. Any slowdown from the Middle Kingdom—Australia’s top trading partner—could weigh on the Aussie, though current data doesn’t yet reflect such weakness.

The Rate Decision is coming up overnight at 00:30 A.M ET.

Read More: After the NFP surprise, is the US dollar back in play?

Australian Dollar Multi-Timeframe Chart Analysis

Weekly Chart — Where do we stand in the bigger picture?

Dow Jones Weekly Chart, July 7, 2025 – Source: TradingView

The 2024 downtrend has been met with a sharp rebound as AUD buyers (and USD Sellers) came in strong – particularly after the Liberation Day selloff and consequent V-Shape rebound.

Prices are approaching the secular downtrend which will be essential to monitor – structural flows are leading to US Dollar outflows but time will tell if this effect is strong enough for an AUD Breakout. Despite cuts, as long as the Australian Economy stays strong, this idea might be gradually playing out.

Prices are consolidating on the weekly, hanging between the 20 week Moving average acting as support (0.6386) and the 200-week MA acting as longer-term resistance at 0.6718, 2 full handles from current prices.

Daily Chart

Dow Jones Daily Chart, July 7, 2025 – Source: TradingView

Prices have came back into the upwards Daily started that had started to form in March, with many touches on the upper and lower bounds confirming the strength of such a trend.

However, trends tend to change on key events such as tomorrow's rate decision; as long as there is no surprise to current cut expectations, players shouldn't expect any sudden breakout – watch for your pre-existing orders which may be triggered by rising volatility in the case of a surprise!

Daily levels to watch:

Resistance Levels:

• Daily resistance 0.6670 to 0.6740
• 0.6655 higher bound of the upwards channel
• 0.6580 most recent swing highs

Support Levels:

• 0.65 psychological level
• 0.6475 MA 50 and lower bound of channel
• Daily Support 0.63 to 0.64

Hourly Chart

Dow Jones 1H Chart, July 7, 2025 – Source: TradingView

AUDUSD's short-term momentum is getting slightly bearish with the 50-H MA breaching the 200-MA, however technicals might not be as strong as markets approach the overnight Rate Decision.

Still, last week's strong US data has led to a strong reversal that has stalled at the 0.64864 immediate lows – a key level to watch for immediate strength analysis.

Momentum is back closer to neutral after a double bottom in RSI and the re-appearance of some USD Sellers.

For immediate resistance, watch the 0.6550 MA Confluence zone, and further upside reaction to last week highs.


Safe Trades!

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