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23.09.2024 03:32 PM
AUD/USD. Analysis and Forecast

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Today, despite the release of weaker PMI data from Australia—the Purchasing Managers' Index—the Australian dollar continues to maintain its position against the U.S. dollar.

The AUD/USD pair is likely rising due to the People's Bank of China (PBOC) injecting liquidity into the banking system, as Australia and China are close trading partners. Therefore, developments in China's economy are currently having a significant impact on Australian markets.

The People's Bank of China injected 74.5 billion yuan into the banking system through a 14-day reverse repo operation, lowering the interest rate to 1.85% from 1.95%. Additionally, it injected 160.1 billion yuan in liquidity through a 7-day reverse repo. The interest rate for this operation remained unchanged at 1.7%.

Moreover, the Australian dollar is strengthening due to expectations surrounding the upcoming interest rate decision by the Reserve Bank of Australia (RBA), scheduled for Tuesday. It is anticipated that the RBA will keep the Official Cash Rate (OCR) unchanged at 4.35%, backed by strong labor market data and ongoing inflationary pressures.

In contrast, the U.S. dollar may weaken, as Federal Reserve policymakers forecast an additional 50 basis points rate cut by the end of 2024. This follows last week's aggressive 50 basis points cut to a range of 4.75–5.00%.

For trading opportunities, attention should be given to the release of U.S. PMI data, expected later in today's North American session.

From a technical perspective, the Australian dollar holds above the 0.6800 level. The 14-day Relative Strength Index (RSI) is holding above 50, indicating that price movements following the release of U.S. news will provide a clearer picture of the pair's trend.

Given that the AUD/USD pair has not fallen below the round 0.6800 level and is trading near its nine-month high, reached on September 19, at 0.6840, a rebound above this level could push the pair even higher.

On the other hand, the AUD/USD pair may find support around the 9-day Exponential Moving Average (EMA) at 0.6767, with the next key support at the psychological level of 0.6700. A break below this level could lead the pair toward the 100-day Simple Moving Average (SMA) and then to its six-week low at 0.6622, near the 200-day SMA.

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