Australian Dollar capped above 0.6300 despite hawkish RBA

• Aussie slips to 0.6345 amid a stronger US Dollar and negative market mood.
• RBA delivers a cautious 25bps rate cut to 4.10%.
• Tariff threats and trade tensions linger and limit the upside.

The AUD/USD pair halted its three-day recovery on the back of the firmer US Dollar (USD) and despite the Reserve Bank of Australia's (RBA) hawkish cut although it managed to keep the trade above the 0.6300 barrier. Market participants remain vigilant about potential United States (US) tariff actions while digesting the RBA's stance and waiting on further economic data.

Daily digest market movers: Aussie contends with trade and policy uncertainties and awaited RBA cut

• The RBA delivered a hawkish 25bps rate cut to 4.10%, in line with many forecasts, emphasizing that this move did not mark the start of an extended easing cycle.
• Uncertainty lingers over inflation trends and labor-market tightness which gave the statement a hawkish tone.
• Market watchers expect only one additional 25bps cut in Q3-2025, citing suboptimal productivity growth and enduring price pressures. However, if trimmed-mean Consumer Price Index (CPI) decelerates faster, the RBA may adopt a more accommodative stance.
• In addition, US President Donald Trump's extended tariff threats on Chinese imports raise the possibility of countermeasures, threatening global sentiment and capping the pair's upside.
• The US Dollar gained momentum after the Dollar Index (DXY) recaptured the 107.00 zone, fueled by recovering US yields, concerns over trade policies and a negative market mood due to the stalled negotiations between the US and Russia over Ukraine.

AUD/USD technical outlook: Pair remains above 20-day SMA as momentum stabilizes

The AUD/USD pair slipped 0.16% to 0.6345 on Tuesday, retreating from a multi-day upswing yet still trading near December highs. The Relative Strength Index (RSI) stands at 63, in positive territory but declining sharply, hinting that buying enthusiasm has eased slightly. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator prints rising green bars, reflecting a gradual uptrend as the pair holds above its 20-day Simple Moving Average.

Despite modest losses, the Aussie retains a supportive tone, though a breach below 0.6300 could test bullish commitments. The next major upside target sits around the 100-day Simple Moving Average near 0.6670.