Aussie Faces Key Test from RBA Decision, China PMI Data
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30 September 2025,05:17

Daily Market Analysis

Australian Dollar Faces Key Test from RBA Decision, China PMI Data

30 September 2025, 05:17

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Key Takeaways:

*Policy rate expected to remain unchanged, with the statement and forward guidance seen as key drivers for AUD direction.

*September readings will shape sentiment on demand for Australian exports, with only a strong upside surprise likely to shift momentum.

*AUD outlook hinges on a hawkish RBA stance and firm Chinese data; disappointment on either front risks reversing recent gains.

Market Summary:

The Australian dollar faces a pivotal session with two major catalysts likely to determine its near-term direction. The Reserve Bank of Australia’s interest rate decision today represents the primary domestic focus, with markets widely expecting policymakers to maintain the cash rate at its current level following August’s 25 basis-point reduction. With inflation remaining above the RBA’s target band and economic growth holding steady, the decision itself is largely priced in, making the accompanying statement and any forward guidance the critical market-moving elements.

A hawkish tilt in the RBA’s communication—particularly any suggestion that the easing cycle is paused rather than poised to continue—would be necessary to propel the AUD meaningfully higher. Conversely, a neutral or dovish tone could see the currency relinquish recent gains despite the expected hold.

Simultaneously, China’s September PMI readings, due ahead of the RBA announcement, will provide an important external impulse. As a proxy for Chinese economic health, stronger-than-expected data would likely boost the Aussie by improving the demand outlook for Australia’s commodity exports. Consensus expects a modest improvement from prior readings, though a significant upside surprise would be needed to substantially alter sentiment.

The combination of these events creates a high-volatility environment for AUD pairs. Traders will be assessing whether the RBA maintains its data-dependent patience and whether Chinese activity indicators confirm a stabilizing growth trajectory. A hawkish RBA coupled with firm Chinese data could extend the currency’s recent rebound, while disappointment on either front would likely renew downward pressure.

Technical Analysis 

AUDUSD, H4

The Australian dollar has staged a strong technical recovery from its weekly low near the 0.6525 support level, reversing earlier losses against the U.S. dollar. The rebound reflects a notable improvement in near-term sentiment, though the pair now faces a critical test at the significant resistance zone around the 0.6600 handle—a previous liquidity area that could trigger profit-taking and renewed selling pressure.

A decisive break above this barrier would signal a potential bullish reversal and open the path toward the next resistance level near 0.6650. The ability to overcome this technical hurdle would suggest that buyers have gained sufficient momentum to challenge the prevailing downtrend.

Supporting this constructive outlook, momentum indicators are showing clear signs of improvement. The Relative Strength Index is advancing toward the midline and appears poised to cross above it, indicating a reduction in bearish pressure. Simultaneously, the Moving Average Convergence Divergence is attempting to cross above its zero line—a development that would confirm a shift in short-term momentum.

Resistance Levels: 0.6620, 0.6660

Support Levels: 0.6555, 0.6500

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