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The Reserve Bank of Australia (RBA) raised the cash rate by 25 basis points to 4.1%, with a narrow 5–4 board vote, signaling internal policy disagreements. The decision reflects concerns over re-emerging inflation driven by strong demand and supply constraints, with inflation expected to stay above the 2–3% target range. Middle East tensions and rising fuel prices are exacerbating inflation risks, prompting the RBA to adopt a cautious, data-dependent approach. Market reaction to the rate hike has been mixed, but AUDUSD has found support at the 100-hour moving average (0.7076) and pushed toward 0.7100, aided by a rebound in US equities. Technical analysis highlights the 100-hour MA as a critical level: holding above it favors further gains toward 0.7107 and 0.7135, while a breakdown below 0.7076 could trigger a sell-off. The RBA's policy uncertainty and global inflation dynamics will remain key drivers for the pair in the near term.
