The AUD/USD exchange rate maintained its robust recovery as market participants anticipated the forthcoming Federal Reserve interest rate decision and its possible divergence from the Reserve Bank of Australia. The value increased to a peak of 0.6640, rising from the previous month’s low of 0.6420. The primary element impacting the AUD/USD pair is the anticipated divergence in policy between the Reserve Bank of Australia and the Federal Reserve in the near future. On one side, there is a belief among analysts that the Fed will reduce interest rates by 0.25%. This marks the third consecutive interest rate reduction this year, occurring just one week after the conclusion of its quantitative tightening policy. Federal Reserve officials express concern regarding the labor market’s performance, as the unemployment rate continues to rise.
A report indicated that the economy experienced an unexpected decline of 32,000 jobs, marking the largest increase in over two years. This report significantly supports the perspective that the bank is poised to reduce interest rates, as indicated. Conversely, indications suggest that the Reserve Bank of Australia may either maintain interest rates at their current level or implement a 25 basis points increase in the upcoming meeting. The likelihood that the bank will uphold a hawkish stance increased following the recent release of robust inflation figures by the country. The headline inflation report increased more rapidly than anticipated by analysts. It deviated further from the bank’s target of 2.0%.
In the near term, the pair is expected to respond to the forthcoming Australia jobs report scheduled for Thursday. Analysts anticipate that the forthcoming report will indicate the economy generated 20 jobs in November, with a slight increase in the unemployment rate to 4.4%. The daily chart indicates that the AUD/USD pair has experienced a robust uptrend over the last few days. The value has increased from a low of 0.6420 in November to the current level of 0.6640. It has recently surpassed the significant resistance level at 0.6617, marking its peak on October 29. The price at 0.6420 served as the neckline for the double-bottom pattern.
The asset has surpassed the 50-day moving average, with the Relative Strength Index and the MACD indicating an upward trend. Consequently, the pair is expected to maintain its upward trajectory as buyers aim for the significant resistance level at 0.6700, which was reached on September 17.