Australian Dollar rises amid hawkish RBA guidance

• AUD/USD climbs as RBA Governor Michelle Bullock emphasizes the need to maintain a restrictive rate stance.
• US presidential election remains the main driver for AUD/USD ahead of Trump-Harris debate.
• Trump's victory expected to be unfavorable for AUD due to his promise to raise tariffs on China.

In Tuesday's session, the AUD/USD rose 0.77% to 0.6638 as the Reserve Bank of Australia (RBA) signaled a hawkish stance on interest rates. The central bank's Governor, Michelle Bullock, stressed the need to maintain a restrictive monetary policy amid persistent inflationary pressures.

The Australian Dollar is also being influenced by the upcoming US presidential election, with a potential victory by Donald Trump viewed as unfavorable for AUD due to his promise to raise tariffs on China. In addition, the pair is expected to react to the release of US inflation data and the Federal Reserve's (Fed) policy meeting this week, as market participants assess their potential impact on the USD.

Daily digest market movers: Australian Dollar rising as RBA favors hawkish guidance

• AUD/USD strengthened as the RBA maintained a hawkish stance, leaving interest rates unchanged at 4.35%.
• RBA Governor Michelle Bullock emphasized the need for a restrictive interest rate stance due to persistent upside risks to inflation.The RBA stated that policy will need to remain restrictive until inflation moves sustainably toward the target range.
• The outlook for AUD/USD is uncertain amid the upcoming US presidential election, with Trump's victory potentially negative for the Australian Dollar due to his proposed tariffs on China.
• Investors will also monitor the Fed's policy meeting this week, with a 25 basis point interest rate cut widely anticipated.

AUD/USD technical outlook: Bulls recover and aim for the 100-day SMA

The AUD/USD pair has been recovering after a recent decline. The Relative Strength Index (RSI) is suggesting that buying pressure is recovering, as its value is at 48, rising sharply in the negative area. The Moving Average Convergence Divergence (MACD) is suggesting that selling pressure is flat, but as it's staying in the red, a change in trend could be seen in the following sessions. The overall outlook suggests a neutral to slight positive sentiment, with the pair likely to trade within a range before breaking out.The pair is striving to hold the psychological level of 0.6600 and reclaim the 200-day Simple Moving Average (SMA) at 0.6630. This move indicates a potential shift in market sentiment, with buyers regaining control after a period of consolidation.