- The AUD/USD outlook stays steady as a less dovish Fed balances positive risk sentiment.
- The US dollar declined further due to the Fed’s uncertain policy stance ahead of the December Fed meeting.
- Traders look ahead to commentary from FOMC members Bowman and Logan for further Fed policy outlook.
The AUD/USD outlook shows the pair witnessed an upside, trading around 0.6590 amid improved US-China trade situation, and the stronger-than-expected Australian CPI lifted the Aussie. On Thursday, President Trump and Xi’s meeting in South Korea boosted the market sentiment. However, less dovish Fed capped the gains, lending room to the Greenback.
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Both leaders reached a middle ground of cooperation. President Xi remarked that the two nations should focus on working together and avoid getting into vicious cycles of revenge. Additionally, he suggested that both need efforts towards areas such as AI, telecom fraud, and money laundering prevention.
He was positive that China is not looking to challenge or replace any country. Meanwhile, President Trump contributed by reducing the tariff significantly, from 57% to 47%. He pledged to resolve the rare earth mineral dispute and Chinese soybean purchases.
These developments increased risk appetite in the market, further boosting the commodity-linked AUD. The strong Q3 Australian inflation data also lifted the AUD, reducing expectations of rate cuts by the Reserve Bank of Australia. Former RBA Governor Philip Lowe opined that the policymakers could keep the cash rate unchanged to keep inflation persistence in check.
On the US side, the Fed reduced the interest rate by 25 bps in Wednesday’s Fed meeting. Meanwhile, Fed Chair Jerome Powell suggested that a rate cut for December has not been confirmed yet, cautioning the markets. The Fed’s cautious stance about a December rate cut lent support to the dollar while weighing the AUD/USD pair on Thursday.
AUD/USD Daily Key Events
The major events in the day include
- FOMC Member Bowman speaks
- FOMC Member Logan speaks
On Thursday, traders await the FOMC members Bowman and Logan’s speeches for further Fed policy cues.
AUD/USD Technical Outlook: Bulls Pause Below 0.6600
The AUD/USD 4-hour chart shows a slight pullback from 0.6590, as the pair trades near 0.6570. The price around the 200-day MA near 0.6573 suggests a slowed bullish bias, signaling profit-booking after the pair climbed to the upside mid-week.
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The price action remains above the 50- and 100-period MAs, suggesting an underlying bullish momentum that can pick up if traders continue to hold the 0.6500 area intact.
The RSI is above 50.0 after the pair pulled back from the overbought region. This move implies consolidation before a further upside. If buyers regain control over the 0.6600 zone, it could open room for 0.6610 and 0.6650. Conversely, a sustained drop below the 0.6560 level could trigger further downside.
Support Levels
Resistance Levels
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