While economists are betting on a November RBA rate cut, support for a September Fed rate cut sent AUD/USD toward $0.65.
Weaker-than-expected US economic data could raise expectations of multiple Fed rate cuts, narrowing the rate differential. A narrower rate differential may push the pair above the 50-day EMA. A break above the 50-day EMA and the $0.65 level may pave the way to the $0.6550 suppot level.
Conversely, stronger-than-expected data could signal a less dovish Fed rate path, potentially widening the rate differential. Under this scenario, AUD/USD could fall toward the 200-day EMA and the $0.6450 support level.
Beyond the data, traders should monitor FOMC members’ comments on the economy, inflation, and monetary policy.
