AUD/USD Awaits the FED for New High

31 בינו׳

The AUD/USD exchange rate is declining towards 0.6550 early on Wednesday due to mixed China's PMI data and weaker-than-expected inflation data in Australia. The CPI confirms that the RBA's interest rate hike cycle is over. Attention now turns to the decision of the United States Federal Reserve. Despite an erratic performance on Tuesday, the AUD/USD erases the gains of the week, weakening daily in tandem with the U.S. dollar. Australia's resilience is noteworthy, despite reports of slower-than-expected stimulus measures from the PBoC. The expected decision of the RBA to maintain the current monetary policy limits the potential upward movement of the exchange rate in the short term. The decrease in inflation in December and labor market tensions support the expectation of unchanged interest rates. The possibility of the Federal Reserve extending its restrictive stance favors further gains for the U.S. dollar, acting as a drag on the AUD/USD. On the H4 chart, the price shows a clear break of a bullish trendline at the level of 0.6580. In my opinion, it could be a false breakout as a perfect bounce is observed on the upper base of the previous bearish trendline at the level of 0.6560. Being close to an order block + Demand, I expect a possible rally and will assess opportunities to enter the market during the day, anticipating the rally after the Fed. If interest rates remain unchanged, the dollar should weaken, and the AUD should strengthen, unless we are facing a manipulated market. Certainly, Powell's statements will be crucial, but I believe there will be no cuts before June. Greetings and have a good trading day.