Achi news desk-
According to CME’s FedWatch Tool, the probability of a June Fed rate cut of 25 basis points fell from 56.1% (April 9) to 18.8% (April 16). The probability that the Fed would leave interest rates at 5.50% in September increased from 8.5% to 31.5% over the same period.
Short Term Forecast
Near-term AUD/USD trends are likely to depend on Australian employment data, stimulus chatter from Beijing, and Fed speakers. Weaker Australian labor market data could tilt monetary policy differential towards the US dollar. However, a stimulus package from Beijing would boost buyers’ appetite for the Australian dollar.
AUD/USD Price Action
Daily Chart
The AUD/USD was sitting well below the 50-day and 200-day EMAs, confirming the bearish price trends.
A breakout of the Australian dollar from the April 16 high of $0.64446 would support a move to the $0.64582 resistance level. A break above the $0.64582 resistance level would bring the $0.65 handle and the 50-day EMA into play.
Considerations should include stimulus talks from Beijing, updates from the Middle East, and statements from the Fed.
Conversely, a fall of AUD/USD below the $0.64 handle could give the bears a run at the $0.62713 support level.
Given the 14-period Daily RSI reading of 35.73, the AUD/USD could drop to the $0.63500 level before entering oversold territory.
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