AUD/USD Forecast: Aussie Dollar Pauses After Four-Month Highs as Uptrend Remains Intact

Last Wednesday, the US Federal Reserve cut interest rates for the third consecutive time by 25 basis points to 3.75% and announced the start of Treasury bond purchases totaling $40.0 billion. At the same time, officials hinted at a possible pause in the easing cycle due to persistently high inflationary pressures in the economy. Recently published November data showed unemployment rising to 4.6%, the highest level since 2021, while employment increased by 64.0 thousand. This shift tilted risks toward labor market cooling, increasing the likelihood of additional borrowing cost reductions next year and adding pressure on the US dollar.

Meanwhile, the Australian dollar weakened amid poor consumer sentiment data from Westpac, with the index falling by 9.0% to 94.5 points in December, reflecting household concerns about rising prices. Nevertheless, the national economy remains broadly resilient, as confirmed by business activity data: in December, the manufacturing PMI rose from 51.6 to 52.6 points, while the services PMI declined from 52.8 to 51.0 points, and the composite index slipped from 52.6 to 51.1 points. At the same time, inflation remains above the Reserve Bank of Australia’s target range: in October, the weighted CPI reached 3.8% year-on-year, while the trimmed mean stood at 3.3%. This strengthens the case for the RBA to maintain its current monetary stance or even tighten policy further next year.

Support and resistance levels

The instrument continues its corrective decline toward the middle Bollinger Band near 0.6575, but is unlikely to fall much further, as technical indicators still point to a prevailing uptrend. Bollinger Bands are sloping upward, MACD remains stable in positive territory, and the Stochastic oscillator has entered oversold territory and may soon turn higher. A renewed upside breakout above 0.6652 (Murray level [6/8]) would open the way toward 0.6713 (Murray level [8/8]) and 0.6774 (Murray level [+2/8]).

Resistance levels: 0.6652, 0.6713, 0.6774.

Support levels: 0.6575, 0.6530, 0.6469.

Trading scenarios and AUD/USD forecast

Long positions can be considered above 0.6652 or on a price reversal near 0.6575, with targets at 0.6713 and 0.6774 and stop-losses at 0.6605 and 0.6530 respectively. Time horizon: 5–7 days.