Australian Dollar Forecast: AUD/USD Coils Ahead of RBA Rate Decision

Australian Dollar Outlook: AUD/USD

AUD/USD is little changed from the start of the week as it holds in a narrow range, and the Reserve Bank of Australia (RBA) interest rate decision may keep the exchange rate afloat as the central bank is expected to retain the current policy.

Australian Dollar Forecast: AUD/USD Coils Ahead of RBA Rate Decision

AUD/USD seems to be tracking the flattening slope in the 50-Day SMA (0.6297) as it still trades within the February range, and exchange rate may continue to move sideways as the RBA warns that ‘the Board remains cautious on prospects for further policy easing’ after implementing a rate-cut for the first time since 2020.

Join David Song for the Weekly Fundamental Market Outlook webinar.

David provides a market overview and takes questions in real-time. Register Here

Australia Economic Calendar

In turn, the RBA is expected to keep the cash rate at 4.10% in April as ‘sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority,’ and more of the same from Governor Michele Bullock and Co. may generate a bullish reaction in the Australian Dollar as the central bank refrains from a rate-cutting cycle.

However, the RBA may further unwind its restrictive policy this year as the transition in US trade policy clouds the outlook for global growth, and a dovish forward guidance may drag on AUD/USD should the central bank prepare Australian households and businesses for lower interest rates.

With that said, AUD/USD may struggle to retain the advance from the monthly low (0.6187) as the RBA starts to change its policy, but the exchange rate may consolidate over the remainder of the month as it seems to be tracking the flattening slope in the 50-Day SMA (0.6397).

AUD/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; AUD/USD on TradingView

Keep in mind, AUD/USD still trades within the February range, with the exchange rate holding above the monthly low (0.6187) as it defends the 0.6240 (61.8% Fibonacci extension) to 0.6270 (2023 low) zone.
A close above 0.6318 (November 2023 low) may push AUD/USD back towards the monthly high (0.6391), with the next area of interest coming in around the February high (0.6409).
Nevertheless, a break/close above 0.6410 (50% Fibonacci extension) may lead to a test of the December high (0.6515), with the next area of interest coming in around 0.6590 (38.2% Fibonacci extension).
At the same time, failure to defend the 0.6240 (61.8% Fibonacci extension) to 0.6270 (2023 low) zone, may push AUD/USD towards the 0.6130 (23.6% Fibonacci retracement) to 0.6170 (2022 low) region, with the next area of interest coming in around the February low (0.6088).

Additional Market Outlooks

Canadian Dollar Forecast: USD/CAD Continues to Coil with More Trump Tariffs on Tap

US Dollar Forecast: Bearish EUR/USD Price Series Persists

USD/JPY Pulls Back Ahead of Monthly High with US PCE in Focus

British Pound Forecast: GBP/USD Coils with UK CPI on Tap

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.