AUD/USD Price Forecast: Navigates 0.6560 Amid RBA and FOMC; Buy Now?

During the early Asian session on Monday, the AUD/USD pair displayed a slight downtrend, hovering above 0.6525. This activity precedes two pivotal central bank meetings: the Reserve Bank of Australia’s (RBA) and the US Federal Reserve’s (FOMC) interest rate decisions, set for Tuesday and Wednesday, respectively.

Currently, the pair is trading around 0.6560, marking a marginal decline of 0.01%.

Central Banks in Focus: RBA and FOMC Decisions Ahead

Expectations are set for the RBA to maintain its key interest rate at 4.35% during its March session, continuing a pattern of stability observed in previous meetings.

Market participants also anticipate a cautious approach from the Australian central bank, with predictions leaning towards minimal rate adjustments through the end of 2024, closely watching the Fed’s rate trajectory for cues.

Unexpected dovish signals from the RBA could pressure the AUD against the USD.

Fed’s Monetary Policy Amid Inflation Concerns

Conversely, the Fed is projected to uphold its current monetary stance in response to rising inflation in the US. Fed Chairman Jerome Powell’s recent comments have highlighted the risks of premature rate cuts, advocating for a vigilant, data-driven approach to achieving the 2% inflation target.

Economic Indicators and Market Sentiment

Recent data, including a slight dip in the US University of Michigan Consumer Sentiment Index for March, alongside stable inflation expectations, provide context for the upcoming central bank announcements.

These economic insights, coupled with the RBA’s upcoming interest rate decision and the Fed’s policy announcement, will significantly influence the AUD/USD price forecast and trading strategies.

In sum, the AUD/USD price forecast remains cautiously optimistic, with imminent central bank decisions and economic indicators poised to dictate short-term market dynamics and potential shifts in the AUD/USD pair’s trajectory.

AUD/USD Price Forecast: Technical Outlook

On March 18, the AUD/USD pair edged up by 0.10%, trading at 0.65656. It now hovers around a pivot point of 0.6574, suggesting a possible shift in market dynamics. The currency faces immediate resistance at 0.6596, with further hurdles at 0.6624 and 0.6668.

Support levels are firmly in place at 0.6550, 0.6520, and 0.6479, designating pivotal areas for potential recoveries or further declines. The Relative Strength Index (RSI) stands at 38, indicating a leaning towards oversold conditions, while the 50-day Exponential Moving Average (EMA) at 0.6582 hints at a near equilibrium in price movement.

The AUD/USD’s ability to maintain above the 0.6550 level, completing a 61.8% Fibonacci retracement, could signal a bullish reversal. However, a dip below this threshold may precipitate a swift sell-off, underscoring a cautiously optimistic outlook pending clear directional cues.