Australia's Central Bank Raises Policy Rate to 18-Year High

The RBA's rate hike is fundamentally a supportive development for the AUD; however, the market may have largely priced it in. The RSI at 29.9 is hovering near oversold territory and could set the stage for short-term rebound buying. With the price below the SMA20 and SMA50 and the MACD in negative territory, the current trend is downward. Any news-driven reaction may be limited; if the pair holds above 0.6980, the likelihood of an upward attempt increases. Nevertheless, caution is warranted given the overall weak technical picture.

The RBA's surprise rate hike indicates that the global central banks' tightening cycle is not yet over and is suppressing risk appetite. This development could push developed country bond yields higher, creating short-term selling pressure in equity markets. In emerging markets like Turkey, the global risk aversion trend and increased dollar demand could put pressure on the TL and local assets. However, the impact is expected to remain limited, as market focus is on Fed and ECB policies.