Chart alert: AUD/USD dipped towards 0.7130 key minor support ahead of RBA decision

• RBA decision in focus with hawkish bias: Markets are pricing a third consecutive 25 bps hike from the Reserve Bank of Australia to 4.35%, with guidance from Governor Bullock key for shaping expectations on further tightening and AUD direction.
• AUD/USD holding bullish structure for now: AUD/USD remains supported above 0.7130 within an ascending channel, with upside potential toward 0.7200+ if momentum holds.
• Downside risks tied to policy tone: A break below 0.7055 (50-day MA) could trigger a bearish reversal, especially if the RBA signals demand destruction risks from persistently high oil prices.

The Reserve Bank of Australia will set its monetary policy today at 12.30 pm (SGT) follow by Governor Bullock’s press conference at 1.30 pm (SGT).

The short-term swaps market has almost fully priced in a 25 basis points hike by the RBA today, its third consecutive interest rate increase, unwinding all of last year’s cuts to bring the cash policy rate to 4.35%, making the RBA a hawkish outlier among other developed central banks due to persistent domestic price pressures remaining above the RBA’s inflation target of 2%-3%.

Today’s RBA monetary policy decision meeting will also be accompanied by its quarterly update of macroeconomic forecasts, offering the first official snapshot of an outlook reshaped by the Middle East conflict.

Most economists expect weaker growth, softer hiring, and a slower return of inflation to the RBA’s 2%-3% target.

All eyes and ears will be at the press conference where RBA Governor Bullock may provide hints on future monetary policy stance, while the consensus remains skewed towards a hawkish tone, offering support for a firmer AUD/USD in Q2.

Tail-risk scenario for a minor bearish reversal on AUD/USD breaking below 0.7055 (also the 50-day moving average) cannot be ignored if Bullock mentioned “demand destruction” to surface in the later part of 2026 due to persistent higher oil prices staying above $100/bbl.

Let’s focus now on the short-term trajectory (1 to 3 days) of the AUD/USD from a technical analysis perspective.

Trend bias: Bullish above 0.7130 short-term pivotal support (see Fig. 1).

Resistances: 0.7200 (upside trigger), 0.7244/7265, and 0.7300

Next supports: 0.7100 and 0.7055

• Price actions continue to oscillate within a medium-term ascending channel in place from the 30 March 2026 low of 0.6833 and remain above its 20-day moving average.
• Friday (1 May 2026) and Monday (4 May 2026)’s minor corrective decline of 1% has led the AUD/USD to retrace towards the lower boundary of the medium-term ascending channel and 20-day moving average.
• The hourly RSI momentum indicator has also declined towards its oversold region (below the 30 level) and just flashed out a bullish divergence condition. These observations increase the odds of a bullish reversal for AUD/USD at this juncture.

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