The Australian Dollar continues to weaken, extending losses for the third straight day. AUD/USD dropped below 0.6550 and finds support at the 0.6485 level. This decline follows growing expectations that the Reserve Bank of Australia (RBA) will cut rates on Tuesday.
Markets widely expect the RBA to lower the Official Cash Rate by 25 basis points. This would bring the rate from 3.85% down to 3.60%. It would also mark the central bank’s third rate cut in 2025, as shown in the chart below.
The expected rate cut has amplified downside pressure on the Aussie. Risk sentiment has also turned negative as US tariff deadlines approach. These developments have boosted demand for the US Dollar as a Safe Haven.
The 4-hour chart for AUD/USD shows that the price is consolidating within an ascending broadening wedge pattern. As the USD Index rebounds, AUD/USD is correcting at a slower pace. As long as the pair remains above 0.64, it is likely to trend upward. A break above 0.6650 could take the pair to much higher levels.
