AUD – The Australian dollar traded cautiously on Monday, awaiting the extent of the Reserve Bank of Australia's (RBA) hawkish stance

The Australian dollar traded cautiously as traders anticipated the RBA would keep interest rates unchanged this week, as expected. It briefly touched a high of US$0.6648, its highest level since mid-September. The RBA will meet on Tuesday, following a series of strong economic data that led the market to abandon any expectations of further policy easing and even begin to price in a rate hike by the end of 2026. Just weeks ago, the market anticipated at least one more rate cut early next year, but now it has fully priced in a rate hike, possibly as early as May, with a roughly 50% probability. Closely watched employment data will be released on Thursday, with 20,000 new jobs expected in November and the unemployment rate slightly rising to 4.4% from 4.3%.

As seen on the technical charts, the Australian dollar broke above the downtrend line extending from September earlier this month and is now testing the near-month high of 0.6617 (October 29th) and the 0.6630 level that it failed to break in early October. Therefore, a break above this level would likely extend the upward momentum significantly. Subsequent resistance is estimated at 0.67 and 0.68, with the next levels expected at 0.6950 and 0.70. Near-term support is expected at 0.6550 and the 25-day moving average at 0.6510, with the next level at 0.6460. The key level is expected to be 0.64, a level the Australian dollar has managed to hold above for the past three months.

Forecast range:
Resistance: 0.6630 - 0.6700 – 0.6800 – 0.6950 – 0.7000*
Support: 0.6550 - 0.6510 - 0.6460 - 0.6400*

Key Focus:
Tuesday: Reserve Bank of Australia Interest Rate Decision (11:30 AM)
Thursday: Australian November Employment Report (8:30 AM)

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