- The AUD/USD forecast shows a rebound in the Australian dollar after the RBA governor’s speech.
- RBA’s Bullock said that Australia’s economy was in a good place.
- The dollar was steady as traders looked forward to Fed speeches this week.
The AUD/USD forecast shows a rebound in the Australian dollar after RBA governor Bullock said the economy was in a good place. Meanwhile, the US dollar held steady ahead of a slew of Fed speeches this week that will give more clues on future policy moves.
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Reserve Bank of Australia governor Michelle Bullock said on Monday that Australia’s economy was in a good place. This means the central bank is comfortable with its current interest rates. Moreover, she noted that slowing inflation and a resilient labor market give them room to lower rates.
Meanwhile, the dollar was steady as traders looked forward to Fed speeches this week. The speeches will likely contain insights into future policy moves. At the same time, the US will release its PCE inflation number that will shape the outlook for rate cuts.
“The lack of significant data until Friday’s core Personal Consumption Expenditures (PCE) inflation release leaves investors open to rethinking Fed rate cuts and the plan ahead,” said Bob Savage, head of markets macro strategy at BNY Mellon.
“Fed speakers will be important, with over 18 events planned,” he added.
AUD/USD key events today
Market participants do not anticipate any high-impact releases from Australia or the US. Therefore, they will keep digesting the RBA governor’s speech.
AUD/USD technical forecast: Bears signaling reversal
On the technical side, the AUD/USD price has broken below a major bullish trendline, indicating a shift in sentiment to bearish. The price also trades well below the 30-SMA, with the RSI near the oversold region, suggesting a solid bearish bias.
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Previously, AUD/USD was rallying, making higher highs and lows. However, bullish momentum started fading when the price neared the 0.6700 key level, followed by a breakout of trendline support. The RSI made a bearish divergence, signaling weakness that allowed bears to take charge. As a result, the price broke below the SMA and the trendline.
After the break, the price could pull back to retest the recently broken line before continuing lower. A break below the 0.6550 support would strengthen the bearish bias and clear the path for the price to reach the 0.6425 support level.
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