Takeaway

The presenter argues that AUD/USD has tilted bearish after breaking below its 200-day moving average and the key 0.70 level, despite the RBA's 25 bps rate hike to 4.6% having been delivered unanimously. The central bank's hawkish stance was largely priced in, while the US dollar continues to draw support from rising Fed tightening expectations and a bond market sell-off. With the burden of proof now on the bulls, upcoming Australian inflation data and US labor/inflation prints will serve as the next major directional catalysts.

What the presenter said

• [00:04] The Australian dollar weakened overnight despite the RBA delivering another interest rate increase.
• [00:23] The RBA unanimously raised rates by 25 basis points to 4.6%.
• [00:32] Concerns regarding persistent inflation, resilient demand, and a tight labor market keep further RBA tightening in play.
• [00:42] The RBA left the door open for another rate hike in the fourth quarter.
• [00:50] Australian inflation data due Wednesday will be critical for market pricing of additional rate hikes.
• [00:59] The US dollar held firm despite softer-than-expected US job openings and consumer confidence data.
• [01:36] Greenback strength is being driven by bond market selling and expectations that the Fed will tighten further.
• [01:55] AUD/USD dropped below its bullish trend line and its 200-day moving average.
• [02:02] Spot broke below the psychologically important 0.70 level.
• [02:13] A daily close below 0.70 reinforces the bearish setup, opening downside potential toward 0.69 followed by 0.68.
• [02:29] A quick reclaim of the 200-day moving average via a hammer candle would provide an encouraging technical signal for bulls.
• [02:42] A subsequent rally above the recent local high of 0.7145 is required to confirm trend resumption.
• [02:55] The burden of proof has shifted to the bulls following the overnight drop.
• [03:00] Downside risks dominate unless the pair reclaims lost technical ground.
• [03:05] Focus turns to Australian inflation on Wednesday, followed by US Core PCE and Non-Farm Payrolls later in the week.

Trade ideas

None stated. The presenter did not put forward a formal actionable trade setup, framing the market view as technically bearish for AUD/USD unless bulls can force a daily close back above 0.70 and the 200-day moving average.

Levels and data cited

Price Levels: - 0.70 (AUD/USD): Psychologically important pivot handle broken to the downside. - 0.69 (AUD/USD): Next downside target if a daily close below 0.70 is confirmed. - 0.68 (AUD/USD): Secondary downside target and previous January breakout zone. - 0.7145 (AUD/USD): Recent local high; resistance level required to confirm bullish continuation.

Data References: - RBA Interest Rate: 4.6% (raised by 25 bps). - US Job Openings: Weaker than expected. - US Consumer Confidence: Weaker than expected. - Australia Inflation Data: Due Wednesday. - US Core PCE Price Index: Due Wednesday. - US Non-Farm Payrolls Report: Due Friday.

Risks and what would invalidate this

• Failure to Reclaim Technical Levels: Risks remain tilted to the downside as long as AUD/USD fails to reclaim the 0.70 handle, its 200-day moving average, and its prior bullish trend line.