The Reserve Bank of Australia (RBA) kept interest rates at 4.10% for the third month today, fueling rumors that the tightening cycle is over. Although according to Reuters, the majority of economists polled by the agency expect another increase by the end of the year after the release of the inflation report for the third quarter.

In the words of RBA chief Philip Lowe today:

→ data indicate that inflation could return to the 2-3% target range at the end of 2025;

→ the labor market remains strong and the economy operates at a high level of capacity utilization, although its development has slowed down;

→ further tightening is still acceptable if inflation is to be suppressed, which stands at 4.9% in July (at an 18-month low).

Reacting to the results of the RBA meeting, the AUD/USD rate fell to the lows of the year, to the level of 0.637.

The bullish argument is that the market may find support for the lower boundary of the descending channel. However, the price fell below the 0.64 level. It is possible that now it will work as a resistance on the principle of mirror levels — the chart shows that this was the case with the levels of 0.66 and 0.65. Following this sequence, the next bearish target is 0.63.

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