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RBA Set to Deliver Hawkish Hike to 4.60%; Aussie Hinges on Guidance

Published: 28 September 2026,06:41

Daily Market Analysis New

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Key Takeaways:

*The RBA is expected to raise the cash rate by 25bp to 4.60%, ending its two-meeting pause and taking rates to their highest level since late 2011.

*While headline inflation eased to 3.5%, trimmed-mean inflation remained elevated at 3.6%, while resilient employment and domestic demand continue to support the case for tighter policy.

*With the hike largely priced in, attention will shift to the policy statement and signals on further tightening. A hawkish tone could support the AUD, while a more cautious stance may trigger profit-taking.

Market Summary:

The Reserve Bank of Australia is widely expected to raise the cash rate by 25 basis points to 4.60 percent at its meeting concluding tomorrow, ending a two-meeting pause and taking the benchmark to its highest level since late 2011. Markets have priced in a high probability of the move, reflecting a shift in the Board’s assessment that upside risks to inflation are materialising.

Recent economic data have reinforced the case for further tightening. Headline inflation eased to 3.5 percent in the year to July, yet the trimmed-mean measure of underlying inflation remained sticky at 3.6 percent, well above the RBA’s 2–3 percent target range. Energy-price pressures linked to Middle East developments, ongoing domestic demand, and the inflationary effects of the global AI and data-centre investment boom have been highlighted by Governor Michele Bullock as key concerns. Labour-market conditions have loosened only gradually. August employment rose by a solid 39,500, driven largely by part-time roles, while the unemployment rate edged higher to 4.6 percent amid a rise in participation. The increase in joblessness is viewed by many as still consistent with a labour market that remains relatively tight by historical standards and insufficient to rapidly ease wage and price pressures.

A rate increase that is largely anticipated is unlikely to generate a large immediate reaction in the Australian dollar on its own. Attention will instead centre on the accompanying statement and any signals regarding the need for further tightening. A hawkish tone that keeps the door open to additional hikes would support the Aussie by reinforcing the interest-rate differential versus major peers. Conversely, a more cautious message or any suggestion that the Board is close to pausing could prompt profit-taking and weigh on the currency, particularly against a backdrop of broader U.S. dollar strength. Near-term volatility around the decision is expected, with the Aussie’s path thereafter depending on how markets interpret the RBA’s evolving reaction function and the trajectory of upcoming inflation prints.

Technical Analysis

EUR/AUD price chart with a downward trendline and resistance area around 1.6229, showing RSI and MACD indicators (bullish setup).

EURAUD, H4:

The EUR/AUD pair has formed a double-bottom price pattern around its recent lows, suggesting that selling pressure may be easing and that a potential bullish trend reversal could be developing. The pair is now challenging its key resistance zone near 1.1620, which represents an important level for confirming whether the emerging reversal can gain further traction.

A decisive breakout above the 1.1620 resistance zone, combined with the formation of the double-bottom pattern, would provide a stronger bullish signal and suggest that buyers are beginning to regain control. Should the breakout be sustained, the pair could enter a new upward trajectory and potentially move toward the next key resistance level at 1.6420.

Conversely, failure to break above 1.1620 could limit the recovery and leave the pair vulnerable to renewed selling pressure. Therefore, the 1.1620 resistance zone remains the key level to watch for confirmation of the potential bullish reversal.

Resistance Levels: 1.6420, 1.6640

Support Levels 1.6194, 1.6012

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