The Australian dollar (AUD) showed varied movements against major currencies during European trading on Tuesday, after the Reserve Bank of Australia’s (RBA) minutes from its recent monetary policy meeting were published.
The minutes indicated that the RBA’s policymakers are wary of growing inflationary pressures and potential risks to economic growth, particularly in light of ongoing conflicts in the Middle East. They expressed a readiness to increase interest rates if necessary to maintain price stability.
On a somewhat brighter note, tensions in the Middle East have eased recently, following a Memorandum of Understanding (MoU) signed between the United States and Iran, which might alleviate some concerns.
However, there’s still the challenge posed by the strengthening US dollar, which has introduced some volatility in the foreign exchange market. This comes against the backdrop of anxieties surrounding the upcoming June US non-farm payroll (NFP) statistics. As of this writing, the US Dollar Index (DXY), which gauges the dollar’s value against a basket of six major currencies, was up by 0.2%, trading around 101.36.
Investors are particularly interested in the May US JOLTS job data set to be released at 14:00 GMT on Tuesday.
AUD/USD Technical Analysis
The AUD/USD pair has dropped to around 0.6875, maintaining a short-term bearish outlook as it remains beneath the 20-period exponential moving average (EMA) of 0.6990. The price has been on a steady decline, with the EMA acting as a resistance level for now, suggesting that any expected rebound may be limited while this barrier is in place.
The Relative Strength Index (14) is currently low, sitting at about 26, indicating rising selling pressure, though there’s been no confirmed reversal at this point.
In terms of resistance, the first level is around the 20-day EMA at 0.6990. A sustained break above this would likely relieve some downside pressure and could pave the way for a rebound towards 0.7100. Conversely, if the price dips below the March 30 low of 0.6833, the decline could extend toward 0.6800 and the January 7 high of 0.6766.
