• AUD/USD trims gains as the US dollar turns positive on risk aversion. 
• RBA raises rates by 25 bps as expected. 
• Australia to report Q3 GDP growth on Wednesday. 

The AUD/USD is rising only modestly on Tuesday, recovering a small portion of Monday’s losses. The recovery from under 0.6700 found resistance below 0.6750. The US Dollar is posting mixed results as Wall Street drops again. 

After RBA, attention turns to data

On Tuesday, the Reserve Bank of Australia (RBA) raised the key interest rate by 25 basis points as expected. The central bank said it expected further increases. “Size and timing of future increases determined by data and outlook for inflation and labour market”, the RBA said in the monetary policy statement. The Aussie gained ground modestly after the decision.

Growth data is due in Australia on Wednesday, with Q3 figures. Market consensus is for a GDP increase of 0.7% with the annual rate rising from 3.6% to 6.3%. 
The AUD/USD failed to benefit and remains pressured amid global risk aversion on Tuesday. The Dow Jones is falling by 0.43%, adding to Monday’s losses. Crude oil prices are down 0.40%, approaching 2022 lows and gold is erasing daily gains. 

 “We think the reopening in China and the uptick in Australia's commodity export prices could provide AUD some relative support against other cyclical currencies, even if we expect AUD/USD to decline modestly amid tightening financial conditions and broad USD strength”, said Danske Bank analysts. 

The AUD/USD is approaching 0.6700 again. A consolidation below would further weaken the short-term outlook, suggesting a test of the next support seen around 0.6660/65. On the upside, the immediate resistance is located at 0.6745/50. A recovery above 0.6775 would strengthen the Aussie. 

Technical levels