Forex News

• AUD/USD trades mixed against its major peers, following the release of the RBA policy meeting minutes.
• The RBA kept the door open for further interest rate hikes.
• Investors await the US JOLTS Job Openings and the NFP data.

The Australian Dollar (AUD) reflects a mixed performance against its major currency peers during the European trading session on Tuesday, following the release of the Reserve Bank of Australia (RBA) monetary policy meeting minutes.

The RBA policy minutes of the June meeting showed that policymakers are worried about higher inflationary pressures and downside growth risks in the wake of the Middle East conflicts and stated that the central bank won’t hesitate to raise interest rates to ensure price stability.

However, the signing of the memorandum of understanding (MoU) between the United States (US) and Iran has eased Middle East risks.

Meanwhile, strength in the US Dollar amid caution ahead of the US Nonfarm Payrolls (NFP) data for June is also hurting the pair. At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% higher to near 101.36.

In Tuesday’s session, investors will focus on the US JOLTS Job Openings data for May, which will be published at 14:00 GMT.

AUD/USD technical analysis

AUD/USD trades lower at around 0.6875, maintaining a bearish near-term bias as the price holds below the 20-period exponential moving average (EMA) at 0.6990. The pair has been sliding steadily, and the EMA now acts as immediate overhead supply, hinting that rebounds are likely to be capped while this barrier remains intact.

The Relative Strength Index (14) sits deep in oversold territory near 26, which suggests selling pressure is stretched but not yet signaling a confirmed reversal.

On the topside, initial resistance is located at the 20-day EMA around 0.6990, and a sustained break above this level would be needed to ease the current downside pressure and open the way for a corrective recovery towards 0.7100. Looking down, the pair could extend its decline towards 0.6800 and the January 7 high of 0.6766 if it drops below the March 30 low of 0.6833.

(The technical analysis of this story was written with the help of an AI tool.)

BNY Markets’ John Velis and David Tam discuss Federal Reserve reserve management purchases (RMPs), noting that new qualifying language suggests the Federal Open Market Committee (FOMC) is more comfortable with system reserves and may adjust RMPs more flexibly. They highlight that reduced RMPs have already calmed repo volatility, but caution that any pause could spur market speculation about an impending balance sheet runoff, requiring clear Fed communication.

RMPs signal evolving Fed stance

"The addition signals that the FOMC is now more comfortable with the aggregate level of reserves in the system and the added qualifier “when appropriate” suggests that continued purchases might not be necessary going forward."

"The additional language should also reinforce the idea that the Fed has broad latitude to change the size of RMPs on a month-to-month basis."

"A further reduction or full-blown halt in RMPs would be at the very least evidence that the Fed feels the quantity of reserves is sufficient to maintain the ample framework."

"If the Fed were to pause RMPs next month, we imagine that speculation that the Fed was commencing balance sheet runoff would take off, even if the Fed’s intentions in pausing RMPs were narrower."

"We would look to Fed communication or the work out of the balance sheet taskforce for clarity if and when the Fed pauses RMPs but are concerned that this might not be forthcoming by next month."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Gold attracts heavy selling pressure for the second straight day amid a broadly firmer USD.
• The US-Iran uncertainty revives inflation fears and bolsters Fed hike bets, boosting the buck.
• Traders look to the US data for some impetus ahead of Fed Chair Warsh and the US NFP.

Gold (XAU/USD) builds on its intraday recovery from the lowest level since November 2025, touched earlier this Tuesday, and climbs to the top end of its daily range heading into the European session. Any meaningful appreciation, however, still seems elusive in the wake of a broadly firmer US Dollar (USD). Against the backdrop of renewed Mideast tensions, mixed signals on US-Iran talks assist the USD to stall its recent pullback from the highest level since May 2025. Moreover, elevated expectations for Federal Reserve (Fed) interest rate hikes favor the USD bulls, warranting caution before positioning for any further move higher for the bullion.

Media reports suggested that the US and Iran have agreed to "stand down" following an exchange of strikes in and around the Strait of Hormuz over the past few days, with both countries accusing each other of violating the ceasefire agreement. Adding to this, US President Donald Trump wrote on Truth Social that Iran had requested a meeting, and it will take place in Qatar's capital, Doha, on Tuesday. However, Deputy Iranian Foreign Minister Kazem Gharibabadi denied that there were plans for technical talks this week. This keeps geopolitical risk premiums in play and benefits the safe-haven USD.

Meanwhile, renewed US-Iran hostilities sparked fears of inflation, which, along with the Fed's more hawkish tilt, bolsters bets for higher interest rates. According to the CME Group's FedWatch Tool, traders are still pricing in around a 63% chance that the US central bank will raise borrowing costs in September and assigning over an 80% probability of a move by the end of this year. The outlook, in turn, is seen as another factor contributing to the bid tone surrounding the USD and driving flows away from the non-yielding Gold, which now seems to have found acceptance below the $4,000 psychological mark.

Furthermore, the Japanese Yen (JPY) plunged to a fresh four-decade low vs the USD, causing collateral damage in precious metal markets. Traders now look to Tuesday's US economic docket, featuring the Conference Board's Consumer Confidence Index and JOLTS Job Openings data. The focus, however, will be on Fed Chair Kevin Warsh's appearance on Thursday at the European Central Bank (ECB) Forum in Sintra. Apart from this, the popularly known Nonfarm Payrolls (NFP) report will offer cues about the Fed's policy path, which will drive the USD and influence the Gold price.

XAU/USD 4-hour chart

Gold is likely to attract fresh sellers at higher levels amid bearish setup

Against the backdrop of the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart, acceptance below the $4,000 mark could be seen as a fresh trigger for the XAU/USD bears. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator sits just below the zero line with a small negative reading, hinting at waning downside momentum rather than a clear recovery. However, the Relative Strength Index (RSI) near 34 flirts with oversold territory, suggesting that selling pressure could start to tire without yet signalling a confirmed bullish reversal.

Any meaningful recovery back above the $4,000 mark, however, is likely to confront an immediate hurdle near the $4,045 region, above which the Gold price could aim to reclaim the $4,100 mark. A further move up could attract fresh sellers and remain capped near the 100-period SMA at $4,180.34. A sustained break above this barrier would be needed to alleviate the current bearish bias and open the door to a more constructive recovery phase.

(The technical analysis of this story was written with the help of an AI tool.)

Deutsche Bank strategists note a solid risk-on tone in US equities as a recovery in technology stocks lifted the broader market. The Magnificent 7 outperformed, helping the S&P 500 to snap a five-day losing streak and putting it on the verge of its best quarterly performance in six years. They also report that European equities were essentially unchanged, with the STOXX 600 posting a marginal gain. While cash markets were flat, European futures were indicated higher early this morning.

Tech strength lifts broader benchmarks

"Markets saw a decent risk-on move yesterday, as a recovery in tech stocks helped to lift US equities more broadly. So the Magnificent 7 (+2.58%) bounced back, which meant the S&P 500 (+1.18%) finally ended a run of 5 consecutive declines."

"Indeed, with just one day of Q2 left, the S&P is on the verge of its best quarterly performance in six years, back when the index was bouncing back sharply from the pandemic slump. Those moves yesterday included a big advance for Tesla (+8.46%), Alphabet (+4.79%) and Amazon (+3.20%)."

"And the Philly semiconductor index (+3.83%) rebounded after posting its worst week since the post-Liberation Day sell-off last April."

"It was a more mixed day for the rest of the US stock market, but both the equal-weighted S&P 500 (+0.18%) and the small-cap Russell 2000 (+0.01%) still inched up to new record highs."

"And over in Europe, equities were basically flat, with the STOXX 600 up +0.04%. European futures are around +0.6% higher this morning."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)