The pair continues its downward trajectory, hitting a four-week low of 0.6386 on Wednesday. The fall is mainly influenced by the decision of the Reserve Bank of Australia (RBA) to maintain the level at 4.35% annually for the ninth consecutive meeting. The decision, which was widely expected, reflects the central bank's cautious approach despite lingering inflation concerns.
RBA Governor Michelle Bullock emphasized that the central bank's current stance on inflation is deliberate and aims to signal its responsiveness to weakening economic indicators. The market currently sees a high probability that the RBA will cut rates in February, with a 63% probability of a 25 basis point reduction. Further cuts are expected at later meetings through May, as investors and analysts factor in possible easing measures.
The focus of AUD supporters is shifting to Thursday's release of Australian employment data, which could provide further clues about the economic outlook and influence the RBA's policy decisions.
The Australian dollar is also seeing significant pressure due to strengthening, adding to its challenges.
AUD/USD Technical Analysis
Chart H4: AUD/USD navigates a wide consolidation range centered at 0.6450. Currently, the pair is forming a downward movement towards 0.6347. Upon reaching this level, a corrective rise is expected to 0.6450, potentially testing this resistance from below before possibly initiating a fresh decline towards 0.6215. This bearish outlook is supported by the MACD indicator, whose signal line is below zero and continues a downward trend.
Chart H1: the market is actively developing a descending wave towards 0.6347. After reaching this target, a corrective move towards 0.6450 could occur. The stochastic oscillator, with its signal line below 50 and approaching 20, confirms this scenario, indicating the possibility of further downward pressure before any corrective rebound.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
