Ella 
AUD/USD struggled to capitalize on the previous day’s modest gains and encountered fresh selling in Asia on Tuesday. Spot prices remain under pressure near one-week lows of 0.6430-0.6420, with little fluctuation after the Reserve Bank of Australia announced its interest rate decision.
As widely expected, the Reserve Bank of Australia decided to keep the official cash rate unchanged at 4.10% at its September meeting. In its monetary policy statement, the central bank said the stance of holding fire provided more time to assess the impact of the rate hike and the economic outlook. This, coupled with weaker Chinese PMIs, weakened the Australian dollar. Also, some buying in the US dollar sparked the pair’s decline.
In fact, the U.S. dollar index, which measures the dollar’s value against a basket of currencies, is just below the nearly three-month peak hit in August and remains well supported by expectations that the Federal Reserve will keep interest rates rising longer term. Despite signs that the U.S. job market is easing, the market is still pricing in a 25 basis point rate hike by the Fed by the end of the year. This still supports high U.S. bond yields and provides support for the dollar, weighing on AUD/USD.
The aforementioned fundamentals support bearish traders, suggesting the least resistance to the downside. The Australian dollar is therefore likely to challenge the yearly low around the 0.6365 area (August 17). Some follow-through selling will be seen as a new trigger for bearish traders and pave the way for a continuation of the decline from the 0.6900 mark on July 14, which constitutes a bearish double top pattern on the daily chart.
