Australian Dollar Forecast: AUD/USD Eyes Yearly Low Ahead of RBA
AUD/USD may attempt to test the yearly low (0.6349) as it extends the decline from the start of the month.
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Australian Dollar Outlook: AUD/USD
AUD/USD may attempt to test the yearly low (0.6349) as it extends the decline from the start of the month, but the Reserve Bank of Australia (RBA) interest rate decision may curb the depreciation in the exchange rate as the central bank is expected to retain the current policy.
Australian Dollar Forecast: AUD/USD Eyes Yearly Low Ahead of RBA
AUD/USD trades to a fresh weekly low (0.6384) following the kneejerk reaction to the 227K rise in US Non-Farm Payrolls (NFP), and the weakness in the exchange rate may persist as it holds below the levels seen since the US election.
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In turn, a further decline in AUD/USD may continue to push the Relative Strength Index (RSI) towards oversold territory, and the oscillator may show the bearish momentum gathering pace should the indicator struggle to hold above 30.
Australia Economic Calendar
Nevertheless, the RBA’s last meeting for 2024 may sway AUD/USD as the central bank is anticipated to keep the cash rate at 4.35%, and more of the same from the central bank may curb the recent weakness in AUD/USD should Governor Michele Bullock and Co. show a greater willingness to further combat inflation.
With that said, AUD/USD may defend the yearly low (0.6349) as the RBA remains reluctant to switch gears, but a dovish forward guidance may produce headwinds for the Australian Dollar as it fuels speculation for lower interest rates.
AUD/USD Price Chart – Daily
Chart Prepared by David Song, Strategist; AUD/USD on TradingView
- AUD/USD extends the decline from the start of the month after struggling to push back above the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) region, with a breach below the 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension) zone bringing the yearly low (0.6349) on the radar.
- Next area of interest comes in around the 2023 low (0.6270), with a break/close below 0.6240 (61.8% Fibonacci extension) opening up 0.6130 (23.6% Fibonacci retracement).
- At the same time, lack of momentum to close below the 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension) zone may keep AUD/USD within the yearly range, but need a close above the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) region to bring the 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement) zone back on the radar.
Additional Market Outlooks
Gold Price Outlook Mired by Flattening Slope in 50-Day SMA
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USD/CAD Defends Post-US Election Rally to Eye November High
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
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