While economists expect a November RBA rate cut, markets remain divided on the Fed’s rate path through the fourth quarter.
Support for Fed rate cuts beyond September could narrow the US-Australia interest rate differential. A narrow rate differential may send AUD/USD toward the August 29 high of $0.65486. A break above $0.65486 and $0.6550 could pave the way toward the $0.66 level.
However, calls to delay Fed rate cuts would widen the rate differential, pushing the pair toward $0.65 and the 50-day EMA. If breached, the 200-day EMA would be the next key support level.
AUD/USD: Key Scenarios to Watch
Bearish AUD/USD Scenario: Weaker Chinese PMI data or dovish RBA cues. These factors could push AUD/USD toward the 50-day EMA, exposing the 200-day EMA.
Bullish AUD/USD Scenario: Stronger Chinese PMI data or hawkish RBA rhetoric. These factors could send AUD/USD toward the $0.6550 resistance level, bringing the $0.66 level into sight.
Origin: Economies
