Australian Dollar Holds Above the Current Market Profile

The minutes from the Reserve Bank of Australia's (RBA) June meeting, released on 30 June, suggested that policymakers are not yet ready to rule out further policy tightening. Board members noted persistent excess demand and broad-based inflationary pressures across the economy, leaving the door open for another interest rate increase if required. Against this backdrop, the interest rate differential between Australia and the United States continues to support the Australian dollar, particularly as markets have scaled back expectations for further tightening by the Fed in the coming months. This combination of a relatively hawkish RBA and a more cautious Fed has helped underpin demand for the Australian dollar, although further macroeconomic data from both economies will likely be needed to reinforce this trend.

Technical Picture

On the 4-hour chart, AUD/USD recovered after declining from the 0.7080 area to June lows near 0.6865. During the rebound, the pair broke above its descending trendline, which some market participants may interpret as a sign that the previous downtrend has come to an end.

The pair is currently trading above the upper boundary of the current market profile at 0.6930 and is approaching the local high around 0.6960. Below the current price lies the Point of Control (POC) at approximately 0.6896, followed by the lower boundary of the market profile at 0.6887. This area could be viewed by buyers as a potential support zone.

Beneath this range sits the green support level 0.6865, representing the next significant reference point should a deeper correction develop. The RSI + MAs indicator remains close to the equilibrium zone, with readings of 55, 51, and 53. The moving averages are broadly flat, suggesting a lack of strong momentum and indicating that the market may be pausing before choosing its next direction.

Summary

The pair's position above the market profile and the break of the descending trendline may be viewed as supportive for buyers. However, the approach towards the 0.6960 resistance area could limit further gains unless additional fundamental catalysts emerge.

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