AUD/USD at a Critical Support Level
The AUD/USD chart reveals that since late October, the pair has been in a downtrend. This is largely driven by monetary policy differences: while the Federal Reserve has begun cutting interest rates, the Reserve Bank of Australia (RBA) has yet to initiate rate reductions.
Tomorrow, the RBA will announce its decision on interest rates. All 44 economists surveyed by Reuters expect the rate to remain at 4.35%, given persistently high core inflation (3.5%) and low unemployment.
Previously, experts forecasted rate cuts in the first quarter of 2025. However, most now anticipate reductions no earlier than the second quarter, as the RBA focuses on bringing inflation back to its 23% target range.
Meanwhile, the AUD/USD chart highlights that the price is sitting at a key support level (marked by a red line), which has already reversed the pair upward three times since the latter half of 2022 (indicated with arrows).
Tomorrow's crucial RBA decision is likely to strongly influence whether this support will manage to reverse the price upward for the fourth time. Monday's robust price action suggests that another upward reversal is possible.
Read more: https://fxopen.com/blog/en/oa-aud-usd-at-a-critical-support-level/
Text source: Forex Trading Blog
