On Monday (August 11), the Australian dollar/U.S. dollar exchange rate fluctuated around 0.6520 in the European session. The focus of the market will be on the Reserve Bank of Australia (RBA) monetary policy meeting, labor market data and the trend of the U.S. dollar.



The market generally expects the Reserve Bank of Australia to announce an interest rate cut on Tuesday (August 12), its third since 2025. The rate is expected to fall to 3.60%, the lowest level since April 2023. Australia's inflationary pressures have eased somewhat, with the CPI falling to 2.1% in the second quarter, close to the target range of 2%-3%, supporting the decision to cut rates. Furthermore, signs of a slowdown in the labor market have reduced the RBA's concerns about overheating.

However, the RBA is likely to adopt a "cautious and gradual" rate cut strategy, and market expectations for future rate cuts remain divided. If the RBA's language is more dovish (for example, maintaining its current cautious stance), it may dampen bearish sentiment on the Australian dollar.

Technical aspects

The current Australian dollar to US dollar (AUD/USD) exchange rate fluctuates around 0.6520. The following are several key technical points:
The upper Bollinger Band is at 0.6547, the lower Bollinger Band is at 0.6461, and the middle Bollinger Band is at 0.6504. The current price is close to the middle Bollinger Band, indicating that the exchange rate is in a period of consolidation. The expansion or contraction of the Bollinger Bands will continue to influence short-term fluctuations.



The RSI is at 56.78, within the 50-60 range, indicating that the market is not currently showing any clear overbought or oversold signals. A break above 60 would suggest further upside potential, while a break above 50 would likely signal downward pressure.
The MACD line is below the signal line and the histogram is below the zero axis, indicating that there is still some bearish momentum in the current market.

Support level:
The current support level is around 0.65. If the exchange rate falls below this level, it may fall further to 0.6430.
Resistance Level:
0.6550 is a key short-term resistance level, a break above which could push prices higher.

Market Sentiment Observation

Market sentiment towards the Australian dollar is currently mixed. On the one hand, expectations of an interest rate cut from the Reserve Bank of Australia (RBA) are bolstering bearish sentiment towards the Australian dollar. On the other hand, the Australian dollar has recently risen by nearly 1%, suggesting a potential reversal of market sentiment. Traders are cautious about upcoming labor market data and the RBA's monetary policy statement, factors that will determine the future direction of the Australian dollar.

Market Outlook

Bullish Outlook:
If the RBA maintains cautious language in its statement and suggests that it may not cut interest rates significantly for the time being, it may boost the Australian dollar further. At the same time, if the Australian labor market data performs strongly, it will provide support for the Australian dollar.

Bearish Outlook:
If the RBA announces a larger rate cut than market expectations, or its language is more dovish (such as emphasizing the need for further rate cuts), it may exacerbate bearish sentiment and push the Australian dollar further down.

Short-term outlook:
In the short term, the Australian dollar may continue to fluctuate and consolidate in the range of 0.65 to 0.6550, awaiting more fundamental data support.

Long-term outlook:
If the Australian economy continues to weaken and the Reserve Bank of Australia continues its interest rate cut cycle, the Australian dollar may face greater downward pressure. However, a global economic recovery or other changes in risk aversion could also be potential positive factors for the Australian dollar.