AUD/USD Price Forecast: Sees fresh downside below 0.6200
|- AUD/USD falls to near 0.6230 as the RBA opens doors for interest rate cuts.
- Fed’s fewer interest rate cut guidance has kept the US Dollar on the frontfoot.
- The declining 20-week EMA suggests that the broader outlook of the Aussie pair is bearish.
The AUD/USD pair drops to near 0.6230 in Tuesday’s European session. The Aussie pair falls as the Reserve Bank of Australia (RBA) monetary policy minutes for the policy meeting that happened on December 10 appeared as slightly dovish, which has weighed on the Australian Dollar (AUD.
The minutes showed that RBA policymakers have become confident that price pressures are easing in line with their expectations, which makes it “appropriate for them” to begin relaxing the “degree of monetary policy tightness”.
Price pressures in Australia have eased to 3% in November. Still, they are higher than the RBA’s target 2% and are unlikely to return before 2026.
Meanwhile, the US Dollar (USD) holds gains in a thin trading volume holiday-curtailed week. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, clings to gains above 108.00. The Greenback remains firm as the Federal Reserve (Fed) has guided a gradual interest rate cut approach for 2025. The Fed sees only two interest rate cuts next year, which analysts at UBS project in policy meetings in June and September.
AUD/USD trades slightly above the four-year low of 0.6180. However, the outlook for the Aussie pair is bearish, as the 20-week Exponential Moving Average (EMA), which trades around 0.6520, is sloping downwards.
The 14-week Relative Strength Index (RSI) oscillates between 20.00 and 40.00, indicating that bearish momentum is intact.
If the Aussie pair fails to hold its recovery above the round-level support of 0.6200, more downside towards the 6 March 2020 low of 0.6120 and the psychological support of 0.6000 will appear.
On the other hand, a decisive recovery above the November 25 high of 0.6550 will drive the asset towards the round-level resistance of 0.6600, followed by the September 11 low of 0.6622.
AUD/USD weekly chart
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