RBA held the cash rate at 4.35%, with all nine board members voting to leave policy unchanged.
The decision itself was expected. The more useful signal came from why the Bank chose to pause.
Inflation is still too high, but consumer spending, housing and the labour market are beginning to cool.
After three rate hikes this year, the RBA now wants to see how much of that tightening is still working through the economy before deciding whether another increase is needed.
AUDUSD Now Has to Clear 0.704-0.708
AUDUSD is now testing the 0.704-0.708 resistance area on the daily chart. Price has pushed into a previous high range, but the latest candles are beginning to stall and momentum has failed to confirm the higher high.
From here, the US side of AUDUSD becomes the next immediate driver, with US CPI due tomorrow on 12 August.
A hotter US inflation print would make it harder for AUDUSD to break higher.
The first pullback references sit near the channel midline around 0.700 and the lower channel area near 0.695.
A clean channel failure would expose the larger 0.683-0.687 support zone.
A cooler US CPI print would give the pair more room to break above 0.708.
If price can close above that area and hold it on a retest, the next references are around 0.718 and then 0.723-0.727.
Fundamentally, the RBA is in a much more comfortable position than earlier in the year.
Softer housing activity, lending, consumer spending and labour conditions suggest its previous hikes are beginning to cool demand, which should gradually ease inflation pressure.
Technically, AUDUSD may also be forming bearish divergence at resistance.
