• AUD/USD trades slightly lower, moving near 0.7070 after the RBA decision.
• RBA held rates at 4.35% but warned hikes may not be over.
• Fed guidance remains the next key driver for the US Dollar side of the pair.

The AUD/USD pair trades slightly lower near 0.7070 on Tuesday, as the Australian Dollar (AUD) struggles to extend gains despite the Reserve Bank of Australia (RBA) maintaining a cautiously hawkish tone.

The RBA kept its cash rate unchanged at 4.35%, pausing its tightening cycle after previous hikes this year. However, policymakers warned that further rate increases remain possible if inflation stays elevated.

The Australian Dollar failed to gain strong support from the decision as markets focused on signs of slowing domestic momentum. Australia’s economy expanded just 0.3% in Q1, while unemployment rose to 4.5%, giving the RBA a reason to wait before tightening again.

Meanwhile, the US Dollar (USD) remains broadly steady as traders look ahead to the Federal Reserve’s (Fed) policy decision, the first under Chair Kevin Warsh. Markets expect the Fed to hold rates steady, but investors will watch closely for signals on whether rate hikes could return later this year.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7071, maintaining a mildly bullish near-term tone as it holds above the 20-period Simple Moving Average (SMA) at 0.7057 and a band of nearby horizontal supports clustered around 0.7069. Momentum remains constructive, with the Relative Strength Index (RSI) hovering near 56, suggesting buyers still have the upper hand, while upside follow-through has yet to decisively challenge the thicker overhead resistance layer.

On the topside, initial resistance is aligned at 0.7080, ahead of the more significant cap from the 100-period SMA at 0.7106, which currently defines the upper boundary limiting further gains. On the downside, immediate support is seen at 0.7069, backed by additional floors at 0.7057, 0.7056, and 0.7043; as long as price holds above this support stack, the pair is likely to remain bid on dips, with a clear break above 0.7106 needed to reinforce a stronger bullish extension.

(The technical analysis of this story was written with the help of an AI tool.)