AUD Extends Gains as USD Softens on Fed Cut Expectations

Australian Dollar gains as the US Dollar softens amid rising Fed rate-cut expectations.

Fundamental Overview

The Australian Dollar extended its rally for a fifth straight session on Thursday, supported by renewed weakness in the US Dollar as markets increase bets on a Federal Reserve rate cut in December.

Strong domestic data helped boost the Aussie. Private Capital Expenditure surged 6.4% QoQ in Q3, far above expectations, while Australia’s first complete monthly CPI reading rose to 3.8% YoY—exceeding forecasts and signaling persistent inflation. This strengthens expectations that the RBA will hold rates at 3.6%, keeping policy restrictive.

RBA policymakers acknowledged a slight uptick in unemployment but maintained that the labor market remains healthy. Meanwhile, futures markets suggest only a 6% probability of an RBA rate cut in December, keeping AUD supported.

AUD/USD Technical Analysis – Chart Overview

Technical Overview

• AUD/USD is trading within a down channel.
• The pair is moving above all SMAs, supporting a bullish bias.
• RSI sits in the bullish zone; Stochastic signals a neutral trend.
• Immediate Resistance: 0.6551
• Immediate Support: 0.6484

How to Trade AUD/USD

AUD/USD has repeatedly tested resistance but struggled to sustain upside. After another corrective move lower, the pair found strong support and broke above a significant resistance level. If price continues to hold above this breakout zone, further upside momentum is likely.

Trade Suggestion:
Limit Buy: 0.6505
Take Profit: 0.6551
Stop Loss: 0.6482

Frequently Asked Questions (FAQ)

Q1: Why is AUD/USD rising?
A softer US Dollar and strong Australian economic data are supporting the Aussie.

Q2: What Australian data boosted AUD?
Better-than-expected private capital expenditure and a hotter-than-forecast CPI reading.

Q3: Will the RBA cut rates soon?
Unlikely. Inflation remains above target, and futures imply only a 6% chance of a December cut.

Q4: What are the key technical levels?
Support at 0.6484, resistance at 0.6551.

Q5: What could push AUD/USD higher?
More dovish Fed expectations or stronger Australian economic indicators.

Disclaimer

This report is for informational purposes only and should not be considered financial advice. Trading forex involves significant risk. Always conduct your own analysis or consult a licensed financial professional before making trading decisions.