Australian Dollar extends upside on RBA hawkish hold

• Australian Dollar (AUD) trades on a stronger note on Wednesday amid the weaker US Dollar. 
• The hawkish messages from the RBA and weaker-than-expected US Retail Sales data support the pair. 
• US markets are closed for Juneteenth; US S&P Global PMI reports will be in the spotlight on Friday. 

The Australian Dollar (AUD) gains momentum on Wednesday, backed by the hawkish hold by the Reserve Bank of Australia (RBA) at its June meeting. The markets have pushed back RBA rate cut expectations and see the start of the easing cycle in 2025, which continues to boost the Aussie. Furthermore, weaker-than-expected Retail Sales prompted the case for US Federal Reserve (Fed) rate cuts later this year, which undermine the Greenback across the board. 

The US markets will be closed on Wednesday due to Juneteenth National Independence Day. Investors will focus on the US S&P Global Manufacturing and Services PMI reports at the end of the week. Any signs of expanding US business activity could lift the US Dollar (USD) and cap the upside for the pair.  

Daily Digest Market Movers: Australian Dollar extends upside due to RBA’s hawkish hold and weaker US data

• The Reserve Bank of Australia (RBA) held the Official Cash Rate (OCR) steady at 4.35% for the fifth meeting in a row at its June meeting. It marks the longest on-hold period since May 2022, when the rate hike cycle began.
• The RBA board noted in a statement that "the economic outlook remains uncertain and recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth.” 
• It would be some time yet before inflation is sustainably in the target range and the recent data had reinforced the need to remain vigilant to upside risks to inflation, according to a statement. 
• The US Retail Sales increased 0.1% MoM in May following the 0.2% decline in April, missing the estimation for an increase of 0.2%, the Commerce Department reported Tuesday.
• Boston Fed President Susan Collins stated on Tuesday that there are possibilities of one or two interest rate cuts from the Fed later this year, but the central bank must be patient amid volatile readings on inflation, per Reuters. 
• Richmond Fed President Thomas Barkin said on Tuesday that he needs to parse several more months of economic data before considering cutting the interest rate.

Technical Analysis: AUD/USD maintains a positive stance within symmetrical triangle pattern

The Australian Dollar trades firmer on the day. The AUD/USD pair has formed a symmetical triangle pattern since May 8. The bullish outlook prevails as the pair stays beyond the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is also supported by the 14-day Relative Strength Index (RSI), which holds in bullish territory around 54.0. 

A decisive break above the upper boundary of the symmetrical descending triangle of 0.6670 will see a rally to 0.6700, the psychological level and a high of May 17. The additional upside filter to watch is 0.6760, a high of January 4.

On the downside, the crucial support level for the pair will emerge near the confluence of the 100-day EMA and the lower limit of triangle patterns at the 0.6590-0.6600 regions. Any follow-through selling will see a drop to 0.6510, a low of March 22, followed by 0.6465, a low of May 1.