AUD Jumped on RBA’s Surprise Hold — What’s Next to Watch?

The Reserve Bank of Australia (RBA) held the cash rate steady at 3.85% on Tuesday, surprising markets that had fully priced in a 25bps cut and up to three cuts by year-end. The Aussie dollar jumped on the decision. But the RBA’s message was clear: this is about timing—not direction.

What to Watch Next

Two key catalysts will shape the RBA’s next move:

1. Q2 CPI (due 30 July) – A soft print could reopen the door for cuts as early as August.

2. Global Trade Tensions – Tariff escalation and demand softness in Asia may hit exports, pressuring Australia’s growth outlook.

While inflation data will likely lock in the next move, global trade risks could prove more decisive for the overall trajectory.

Higher tariffs on Australia’s trading partners are set to feed into regional weakness. In time, this will weigh on Australia’s exports. Meanwhile, diverted global supply could bring cheaper goods into the domestic market, reinforcing disinflation.

Overall, these forces support the case for two to three cuts before year-end—especially if wage growth stays contained. The RBA has bought itself time and is keeping optionality open. The path to easing is still intact, but the trigger now lies in how cleanly inflation falls—and how much global risks escalate.

Market Focus for Vantage Traders

AUD/USD — Consolidating Within Rising Channel

AUD/USD remains in a bullish channel after a strong 10% rally since April. Price recently pulled back to test support near the 50-day MA (~0.6490) and lower channel trendline. The pair is currently trading around 0.6525, just above key horizontal support levels. Momentum indicators (RSI ~52) are neutral, suggesting consolidation. A break below 0.6490 could open downside toward 0.6400, while upside resistance stands at 0.6616 and 0.6624.

EUR/USD — Bullish Momentum Meets Resistance

EUR/USD has rallied sharply off 2022 lows and is now testing a major resistance zone around 1.1720–1.1900. The trend remains bullish, supported by an ascending channel and moving averages stacked in a bullish formation. RSI near 70 reflects stretched momentum, raising the risk of short-term pullback toward 1.1450. A breakout above 1.1900 would confirm continuation toward 1.2250. Traders should watch for ECB signals and US inflation data to set the tone. Dips remain buyable as long as price stays above 1.1220.

XAU/USD — Rangebound but Constructive Above Trendline

Gold is holding above a key ascending trendline near $3,270, despite repeated tests of overhead resistance at $3,360–3,380. The broader trend remains bullish, but RSI has slipped below 50, indicating weakening momentum. Price is consolidating within a $3,260–$3,361 range. A break above $3,380 could open up a retest of $3,455, while a breakdown below $3,170 may trigger a deeper correction toward $3,000. As trade tensions and global rate expectations shift, gold remains a defensive hedge—but needs a fresh catalyst to break higher.

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