- The AUD faces pressure while the USD reclaims safe-haven demand.
- The RBA’s cautious monetary stance and diverging Fed policy expectations maintain a downside bias.
- Traders are looking ahead to the upcoming Initial Jobless Claims and RBA meeting minutes for policy cues.
The AUD/USD weekly forecast suggests the pair was weighed down amid cautious market sentiments and geopolitical instability that supported the US dollar. The pair slid below the key 0.6500 handle.
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The dollar’s safe-haven appeal was revived by the renewed political uncertainty in France and Japan and growing concerns regarding the persistent US government shutdown. Despite dovish remarks from some Federal Reserve officials hinting at further policy easing, the dollar sustained its strength. Meanwhile, investors anticipated key US data releases such as October’s Michigan Consumer Sentiment and Inflation Expectations reports.
According to the CME FedWatch Tool, markets are pricing two more rate cuts this year. However, ambiguity over time and scale continues to shape global risk sentiment.
On the other hand, US President Trump’s fresh tariff warnings against China have sparked fears of a trade war. This news has weighed down risk-sensitive currencies like the Australian dollar.
Given the tight trade bond between China and Australia, the trade tensions have aggravated losses in Australia, prompting investors to reduce exposure to growth-linked assets.
Domestically, the Reserve Bank of Australia maintained its Official Cash Rate at 3.6%, while acknowledging the lingering inflation pressures. RBA Governor Michele Bullock affirmed that while service inflation remains elevated, it aligns with expectations. Markets now expect the RBA to keep the rates unchanged throughout the year.
AUD/USD stays vulnerable amid a strengthening US dollar, declining risk appetite, and global trade instability. The upcoming RBA minutes and US economic releases will likely shape short-term momentum, though the overall bias remains downside.
AUD/USD Weekly Key Events
In the upcoming week, traders will anticipate Initial Jobless Claims and Continuing Jobless Claims, which are the key drivers of the US labor market strength. However, the major focus remains on the US inflation data. From Australia, RBA Governor Bullock’s speech from Australia is due, which could guide the policy path.
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AUD/USD Weekly Technical Forecast: Maintains Bearish Momentum Towards 0.6420
The AUD/USD weekly technical forecast indicates the pair trades under pressure near 0.6470 after breaking the immediate support at 0.6530. The price stays below the 50-day MA, indicating a bearish bias, while the 200-day MA around 0.6420 serves as the next key support zone. A decisive break below this level could potentially expose the 0.6300 level, last tested in mid-August.
The RSI declines toward 24, nearing the oversold territory, signaling potential for a brief consolidation followed by a further downside. The overall structure supports sellers as the pair remains beneath the 0.6550 resistance level. On the upside, a sustained rebound above 0.6550-0.6590 could shift the momentum towards 0.6700.
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