Australian Dollar Price Forecast: Aussie steady as markets digest RBA signals

• AUD/USD extended its recovery, rising near 0.6580.
• RBA doubled down on its hawkish rhetoric on Thursday.
• Commodity prices are also providing the AUD with traction.

The AUD/USD pair recorded an upturn at 0.6580 during Thursday's sessions, a notable rise by 0.80%. The uplift is linked to a mix of the Reserve Bank of Australia's (RBA) recent echo of their hawkish tone and an increase in commodity prices, hence making the Australian Dollar an eminent performer.

Due to the mixed Australian economic outlook and the RBA’s hawkish stance, markets are now pricing just 25 bps of easing in 2024.

Daily digest market movers: RBA's hawkish tone directs the AUD

• The Reserve Bank of Australia firmly held rates steady at 4.35%, strongly echoing "the Board is not ruling anything in or out”.
• Importantly, the Bank warned about the need to stay vigilant toward potential upside risks to inflation, indicating no quick turnaround in policies.
• RBA's Governor Bullock clearly stressed on Thursday that there is lesser necessity for rate cuts. She struck a hawkish tone, stating that the board "will not hesitate to raise rates if it needs to" to combat persisting inflation.
• Australian interest rate futures were quick to revise from almost 50 bps of cuts by the end of the year to 25 bps.

AUD/USD technical outlook: Volatility and indicators adjust to RBA decision

The AUD/USD in recent sessions has been trading within a specified range between the support at 0.6350 and resistance at 0.6590. The Relative Strength Index (RSI) rose toward 40, indicating a balance between buying and selling pressure, but mostly signifying a recovery of bullish sentiment.

The Moving Average Convergence Divergence (MACD) displays a series of decreasing red bars, aligning with a potential deceleration of bearish momentum.