Jakarta, GIC Trade – The Australian dollar depreciated past $0.665, sliding to its weakest level in four weeks after the Reserve Bank of Australia (RBA) kept its policy interest rate unchanged at 4.1% during the August meeting, defying market expectations for a 25 basis point rate hike.

In its policy statement, the RBA explained that the decision to maintain the interest rate would give them more time to assess the impact of policy tightening so far and the economic outlook.

This decision was taken as the latest data showed that Australia’s consumer price index rose less than expected in the second quarter, while producer inflation slowed to its lowest level in two years.

This move also marks the first time the RBA has kept rates unchanged for two consecutive meetings after raising rates by a total of 400 basis points since May of last year to an 11-year high.

The RBA's August policy meeting is Philip Lowe's last as governor before Michele Bullock takes over at the end of his term on September 17.

The Australian dollar was the worst-performing major currency on the first day of August following the dovish surprise from the Reserve Bank of Australia (RBA). Ahead of the ISM manufacturing PMI and JOLTS job openings data from the U.S., the U.S. dollar benefited from risk-averse market sentiment and gained strength.

Fundamentally, the RBA's decision to keep rates at 4.1% puts pressure on the Aussie dollar, as the market had anticipated a 25 basis point increase. Now, let’s take a look at the technical analysis:


Technical Analysis



AUD/USD on the one-hour timeframe is attempting to move downwards, touching the support level at 0.66310 and heading towards the next support level at 0.65880. The downward trend is also evident from the FXBot template, where the AUD is lower by 0.8 compared to the USD, which is at 6.4. Meanwhile, the bearish bias is supported by the sell signal indicated by the red arrow.

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