Bearish View
- Sell the AUD/USD pair and set a take-profit at 0.6000.
- Add a stop-loss at 0.6350.
- Timeline: 1-2 days.
Bullish View
- Buy the AUD/USD pair and set a take-profit at 0.6350.
- Add a stop-loss at 0.600.
The AUD/USD pair continued its strong downward trend, reaching the psychological point at 0.6200, its lowest level since October 2022. The exchange rate has dropped by almost 9% this year as the US dollar index gained momentum.
Top Forex Brokers
RBA Minutes and US Consumer Confidence Data
The AUD/USD pair has remained in a strong downtrend even as the Reserve Bank of Australia (RBA) became the second most hawkish central bank this year after the Bank of Japan (BoJ).
The RBA has resisted the pressure to cut interest rates as other central banks slashed them this year. Instead, it has maintained rates steady and offered no roadmap for when the next cuts will happen.
The bank will publish minutes of its last monetary policy meeting on Tuesday. These minutes will provide more information on what to expect in the coming meetings in 2025. Most analysts expect the bank to start cutting rates in its February meeting.
The other important AUD/USD news will be the Conference Board's consumer confidence report, which provides more information about the health of the American consumer. Consumer spending accounts for a big part of the American economy.
Economists predict the data to show that confidence rose from 111.7 in November to 112.9 in December. An improvement of that reading would be a positive sign that the economy was doing modestly well.
While these numbers are important, their impact on the AUD/USD pair will be limited because the Fed has already made its interest rate decision. It slashed interest rates by 0.25% and hinted that it will deliver two more cuts in 2025.
AUD/USD Technical Analysis
The AUD/USD exchange rate has been in a downtrend due to the highly strong US dollar. After the Fed decision, the dollar jumped to its highest level since 2022. The rate dropped and bottomed at 0.6220, its lowest level since October 2022 and the bottom of the trading range.
The pair has slipped below the 50-day moving average and key support at 0.6348, its lowest level since August 5. The Relative Strength Index (RSI) has pointed downwards, falling from the extreme overbought point of 70 to the current 30.
Therefore, the path of the least resistance is downwards as the US dollar strength persists. If this happens, the next point to watch will be at 0.6000, which coincides with the weak, stop & reverse point of the Murrey Math Lines.
Ready to trade our free trading signals? We’ve made a list of the top forex brokers in Australia for you to check out.