AUD/USD Forecast: Bearish pressure prevails as US Dollar holds firm, RBA next

Matías Salord FXStreet

AUD/USD Current Price: 0.6365

Reserve Bank of Australia expected to keep the key rate unchanged at 4.10%.
US Dollar holds firm as the US 10-year Treasury yield reaches 4.70%.
The AUD/USD pair reaffirms its bearish trend, with the Aussie dangerously near crucial support at 0.6350.

The AUD/USD pair experienced a sharp decline on Monday, extending the reversal that began on Friday from 0.6500. After a brief period of weakness, the US Dollar regained strength, pushing the pair below 0.6400. The focus now turns to the Reserve Bank of Australia (RBA) meeting and upcoming US economic data.

The US Dollar Index (DXY) rose to a fresh multi-month high near 107.00, supported by positive economic data and higher Treasury yields. The US 10-year Treasury yield reached 4.70% for the first time since 2007. Economic data from the US surprised on the upside, with the ISM Manufacturing PMI rising from 47.6 to 49.2, surpassing the market consensus of 47.7. The Price Index dropped sharply to 43.8, compared to the expected 48.6.

On Tuesday, the Reserve Bank of Australia (RBA) will announce its decision on monetary policy. The key interest rate is expected to be kept unchanged at 4.10% in Michele Bullock's first meeting as Governor. The statement accompanying the decision will be closely watched for any changes. While inflation is above the target, a hawkish tone is expected to remain in place. The impact of the meeting could be muted if Bullock maintains the same narrative without any surprising developments.

RBA Preview: Forecasts from eight major banks, no change in rates, hiking in November?

Regarding economic data on Tuesday, Australia will report August Building Permits and Home Loans, while the US will release the JOLT Job Openings report. The US job market will be the key focus of the week, with the ADP Employment report on Wednesday and the Nonfarm Payrolls on Friday.

AUD/USD short-term technical outlook

The AUD/USD pair dropped so far more than a hundred pips from Friday's high, approaching the 0.6350 area. This level represents the lower boundary of a wide range that has contained the pair since mid-August. The reversal indicates that risks continue to be skewed to the downside, aligning with the prevailing bearish trend.

The 4-hour chart shows the price well below key simple moving averages (SMA), and technical indicators suggest further weakness ahead. The next level to watch is the 0.6350 area, and a break below that would likely lead to a test of the September low at 0.6331. If the downside momentum persists, the focus may shift towards the 0.6300 level. The Australian Dollar needs to rise above 0.6400 to alleviate the bearish pressure. The key resistance stands at 0.6425, which is a confluence of key SMAs.

Support levels: 0.6350 0.6330 0.6300

Resistance levels: 0.6400 0.6425 0.6450

View Live Chart for the AUD/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.