- The AUD advanced amid surging inflation expectations and a weakening USD.
- Traders await speeches from Fed Chair Jerome Powell and RBA officials for policy direction.
- The pair stays consolidated, with potential movement above 0.6620 or below 0.6560.
The AUD/USD forecast remains mildly supported on Thursday amid rising domestic inflation expectations and a waning US dollar. Australia’s consumer inflation expectations reached 4.8% in October, the highest since June. The speculation that inflation could exceed forecasts in the third quarter has put the RBA on hold.
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This supports the expectation that the Reserve Bank of Australia (RBA) will maintain a cautious monetary policy stance after holding rates at 3.6% in September due to increasing inflation and a tight labor market. In the meantime, Australia’s subdued housing approvals and declining consumer confidence are proof of underlying economic strain. Still, the inflationary pressure persists.
On the US part, the dollar eases as the Federal Reserve’s September minutes signal that more rate cuts could occur this year. Markets are pricing in a 92.5% probability of an October rate cut. Mixed Fed commentary indicated that policymakers are divided on the easing path. Some reaffirm inflation risks, and some point to easing needs amid declining growth.
Furthermore, the ongoing US government shutdown, now in its ninth day, is exacerbating uncertainty and causing a decline in investor confidence. This delays crucial economic data releases and could significantly affect the AUD/USD pair.
AUD/USD Daily Key Events
- Fed’s Kashkari speech
- Consumer Inflation Expectations
- Initial Jobless Claims
- Continuing Jobless Claims
- Fed’s Chair Powell speech
- Fed’s Bowman speech
Today, traders are looking forward to policy cues from speeches of Fed Chair Jerome Powell, Fed Kashkari, and Fed Bowman. Additionally, traders are closely watching the jobless claims for insights about economic momentum, which could lead to trigger volatility in the pair.
AUD/USD Technical Forecast: Challenging Resistance Near 0.6620
The AUD/USD 4-hour chart indicates that it hovers under 0.6600, attempting to continue gains after rebounding from the 0.6560 support area. The 50-and 100-period SMAs hold near 0.6610-0.6620, limiting further gains, while the 200-period SMA near 0.6580 offers strong support. If the pair pushes through 0.6620, it could lead to an upside trajectory towards the 0.6660–0.6680 zone. However, if it fails to hold above 0.6580, a pullback toward 0.6550 could be expected.
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The RSI stays under 50.0, indicating neutral to mildly bearish momentum after being capped near the 50-level, suggesting limited buying pressure. Overall, the pair stays range-bound. Bullish confirmation needs a breakout above the 100-SMA to reclaim control. A decline below 0.6560 could reinforce bearish continuation.
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