AUD to USD Forecast: Australian Economy in Focus Amid RBA Rate Path Speculation
According to the CME FedWatch Tool, the probability of a 25-basis point Fed June rate cut fell from 56.1% (April 9) to 18.8% (April 16). The chances of the Fed leaving interest rates at 5.50% in September increased from 8.5% to 31.5% over the same period.
Short-Term Forecast
Near-term AUD/USD trends will likely hinge on Australian employment data, stimulus chatter from Beijing, and Fed speakers. Weaker Australian labor market data could tilt monetary policy divergence toward the US dollar. However, a stimulus package from Beijing would boost buyer appetite for the Aussie dollar.
AUD/USD Price Action
Daily Chart
The AUD/USD sat well below the 50-day and 200-day EMAs, confirming the bearish price trends.
An Aussie dollar breakout from the April 16 high of $0.64446 would support a move to the $0.64582 resistance level. A break above the $0.64582 resistance level would bring the $0.65 handle and the 50-day EMA into play.
Considerations should include stimulus discussions from Beijing, updates from the Middle East, and statements from the Fed.
Conversely, an AUD/USD drop below the $0.64 handle could give the bears a run at the $0.62713 support level.
Given a 14-period Daily RSI reading of 35.73, the AUD/USD could fall to the $0.63500 level before entering oversold territory.
