Snapshot: The Aussie has slumped back toward two-month lows near $0.7050 after the RBA held the cash rate steady at 4.35% at its 14:30 AEST meeting, marking its first pause this year. While the Board warned that further hikes remain on the table due to elevated inflation, the market has seized on the decision as a sign of slowing domestic momentum. This pivot is exacerbated by a further slowdown in China, where retail sales posted their first contraction in over three years.
- Technical Levels: A clean break below $0.7050 opens the door to the $0.7010 support zone, as leveraged funds continue to unwind their net-long positioning, which was pruned by 23,652 contracts last week to +18,160.
- NY Catalyst: Watch US real yields (sitting at 2.17%) and the broader risk tone ahead of the NY session; any upward pressure on US yields will compound the pain for the commodity complex.
Bias into NY: We lean short AUD/USD, looking to sell intraday rallies up to 0.7080 for a target of 0.7015. The domestic interest rate peak is clearly in, and a deteriorating Chinese macro backdrop leaves the pair highly vulnerable to any USD-supportive US data later today.