1 July 2025,03:48
Daily Market Analysis
1 July 2025, 03:48
Key Takeaways:
*The Australian dollar remains range-bound as traders await next week’s RBA policy announcement, with no signs of imminent aggressive easing.
*Better-than-expected Chinese manufacturing data lifted the Aussie, reflecting its sensitivity to economic signals from its top trading partner.
*Upcoming retail sales data could influence short-term AUD sentiment and reinforce expectations for a steady RBA outlook.
Market Summary:
The Australian dollar remained range-bound in the latest session, supported by broad-based uncertainty surrounding the U.S. dollar. While the Aussie held steady, traders anticipate heightened volatility ahead, with the Reserve Bank of Australia (RBA) set to announce its policy decision next week.
The RBA last cut its benchmark rate by 25 basis points in May, and the central bank’s meeting minutes suggest a cautious stance moving forward. Policymakers signaled a preference for currency stability and indicated no urgency for aggressive easing amid persistent geopolitical risks in the Middle East and increased uncertainty surrounding U.S. fiscal and trade policies.
Adding to near-term support, the Aussie found renewed strength after China’s latest manufacturing PMI reading beat expectations, reinforcing optimism over economic conditions in Australia’s largest trading partner. As a proxy for Chinese growth sentiment, the Australian dollar often reacts positively to upbeat Chinese data.
Markets are also closely watching Australia’s retail sales figures, due tomorrow. A stronger-than-expected print could further bolster the local currency and reinforce the case for a steady RBA outlook.
While short-term sentiment remains cautiously constructive, the combination of upcoming economic data and policy decisions is likely to inject fresh volatility into the AUD/USD pair in the sessions ahead.
The Australian dollar continued to advance against the greenback, with the AUD/USD pair extending gains within its established uptrend channel. The pair has now climbed to its highest level since November, underlining a firm bullish bias following its sharp recovery from the April lows.
Technical indicators reinforce the bullish outlook. The Relative Strength Index (RSI) is approaching overbought territory, suggesting strong upward momentum, while the MACD has formed a golden cross above the signal line and continues to edge higher—both signals pointing to sustained buying pressure.
With bullish momentum building and the pair trading near breakout levels, traders are closely watching for potential catalysts—including upcoming domestic data and next week’s RBA rate decision—that could determine whether the rally continues or stalls near resistance.
Resistance levels: 0.6644, 0.6715
Support levels: 0.6525, 0.6416
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