Aussie dollar traders are preparing for some big event risk in the trading week ahead, and Tuesday’s Reserve Bank Rate call is top of the list for potential trading opportunities. Having surprised the market by keeping rates on hold at the last meeting, the RBA is nearly 100% priced in by the market to cut interest rates by 25-basis points this week. The current base rate is 3.85% but this is expected to come down to 3.60% on Tuesday as the bank cuts for the third time in this cycle, as the latest inflation and jobs numbers push the case for further easing.
Another surprise hold would really hit the market, with the Aussie likely to rise strongly. However, most traders feel that we will get the cut, and moves in the market for the currency will come from forward guidance on whether we see another rate cut before the end of the year. The market is expecting to see another by November, and anything from Governor Michele Bullock that pulls back on that expectation should see the Aussie move higher. Conversely, a more dovish outlook in the statement or press conference could see the Aussie move lower sharply.
The Aussie is currently trading just above 65 cents, and traders are expecting to see some moves on Tuesday. Trendline support on the Daily chart currently comes in around 0.6515, with resistance now just under 66 cents, and traders are expecting one of those sides to be tested in the coming days.
Resistance 2: 0.6624 – 2025 High
Resistance 1: 0.6598 – Trendline Resistance
Support 1: 0.6512 – Trendline Support
Support 2: 0.6417 – August Low
