AUD/USD faces steeper decline below 0.70 after RBA rate hike yields little support

After today's RBA decision, the most notable point is that AUD/USD has still not gained a significant upward movement despite the rate increase.

The RBA increased the cash rate by 25 basis points to 4.60%, the highest since 2011. In theory, that should have boosted the Australian dollar. But the pair has dipped under 0.7000, and the technical outlook is growing more concerning.

AUD/USD is approaching a break of several important levels around the same time.

The drop last week already seems to be holding below the key rising trendline from the June to July lows, and now there is also a solid break below the 200-day moving average and the important 0.7000 mark. That is a notable combination of support levels failing.

A daily close below that region, particularly under 0.7000, would make the retreat much harder to ignore. It would also put AUD/USD decisively below both of its key daily moving averages. The last such break occurred in November 2025 and was brief, while a longer-lasting move below both averages has not been seen since April 2025.

That would clear the way toward the July swing lows near 0.6913-22, after which the June low of 0.6865 would come under scrutiny.

What makes the move more noteworthy is that while the RBA was not overtly dovish, it also did not reaffirm the market's expectation of another rate hike in November. Bullock stated that rates could still be increased further if required, but the nuance in her press conference took some shine off the headline hike.

Specifically, Bullock downplayed the significance of tomorrow's August CPI report. She emphasized that monetary policy acts with a delay and that the RBA must still see how this year's rate rises transmit through the economy.

Meanwhile, the US dollar continues to be propped up by high Treasury yields, so AUD/USD is not receiving much support from that side either.

At present, the 0.7000 level is the critical line. A return to around 0.7025-0.7050 would relieve some short-term technical pressure. However, if the break persists, the Australian dollar may have begun a much more serious decline.