AUD/USD Forecast: 0.6896 Support at Risk as RBA Raises Rates to 4.85% Today

The Australian dollar remained under pressure against the US dollar after AUD/USD slipped below 0.7000 and reached a two-week low ahead of the Reserve Bank of Australia’s (RBA) November policy announcement. The central bank subsequently raised its cash rate by 25 basis points to 4.85%, marking its fifth increase of 2026. However, the move has not removed uncertainty over the currency’s direction. Traders are assessing the RBA’s inflation concerns, the possibility of a policy pause and the technical levels that could determine the pair’s next move.

RBA raises rates to 4.85%

The Reserve Bank of Australia lifted its cash rate from 4.60% to 4.85% on November 3, matching market expectations. The increase takes borrowing costs to their highest level in approximately 18 years and represents the fifth rate hike this year as policymakers attempt to contain persistent inflation.

However, the decision was not unanimous. Six members of the Monetary Policy Board supported the increase, while three preferred to leave rates unchanged. The divided vote suggests policymakers are weighing the need to control inflation against the economic consequences of tighter financial conditions.

Governor Michele Bullock also faces a difficult policy balance. Inflation risks remain elevated, but higher borrowing costs are placing additional pressure on households and businesses. The bank’s guidance and Bullock’s assessment of future inflation will therefore be important in determining whether another increase is likely or whether rates have reached their peak.

The US midterm elections add another potential source of volatility for the US dollar, potentially influencing short-term movements in AUD/USD.

AUD/USD technical outlook remains bearish

Before the RBA announcement, the pair had failed to extend its recovery above the 200-day Simple Moving Average (SMA) at 0.7058. It subsequently consolidated below the psychologically important 0.7000 level.

The technical indicators presented a mixed picture. The Moving Average Convergence Divergence (MACD) was slightly positive, while the Relative Strength Index (RSI) stood near 46, indicating modestly improving momentum. Nevertheless, the broader near-term bias remained negative as the pair traded below important resistance levels.

The Fibonacci retracement structure also identifies 0.7027 as an important recovery barrier. Until buyers reclaim this level, upward moves could encounter renewed selling interest.

Key AUD/USD levels to monitor

On the downside, the 23.6% Fibonacci retracement at 0.6977 represents the first technical support. A sustained break beneath this level would expose the more significant structural floor near 0.6896. Losing that support could reinforce the bearish outlook and attract additional selling.

The principal resistance levels are:

• 0.7027: 38.2% Fibonacci retracement
• 0.7058: 200-day SMA
• 0.7068: 50.0% Fibonacci retracement
• 0.7108 and 0.7166: Higher recovery barriers
• 0.7239: Previous swing high

Conclusion

The RBA’s latest rate increase provides support for the Australian dollar in principle, but the divided policy vote leaves uncertainty over the next move. AUD/USD remains technically vulnerable below 0.7027, with 0.6977 and 0.6896 defining the key downside levels. A sustained recovery above 0.7058 would weaken the bearish structure, while a break below 0.6896 could deepen the decline.