AUD/USD Price Forecast: Bulls await move beyond 0.6400 and 100-day SMA hurdle

The AUD/USD pair attracts some dip-buying at the start of a new week and reverses a major part of Friday's modest pullback from over a two-month high amid the emergence of fresh US Dollar (USD) selling. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, drops to its lowest level since December 10 in the wake of Friday's disappointing US macro data. The S&P Global's flash US Composite PMI dropped to 50.4 in February, from 52.7 in January. The data pointed to a weaker expansion in overall business activity across the private sector amid the uncertainty surrounding US President Donald Trump's policies. 

Separately, the University of Michigan reported that its US Consumer Sentiment Index dropped more than expected, to a 15-month low of 64.7 in February compared to the previous month's final reading of 71.7. Moreover, households saw inflation over the next year surging to 4.3% - the highest since November 2023 - and running at 3.5% - the highest since 1995 – over the next five years. This comes on top of a disappointing sales forecast from Walmart, which raised doubt about US consumer health. Moreover, concerns that Trump's trade tariffs could undermine consumer spending fuel worries about the US growth outlook and weigh on the USD. 

The Australian Dollar (AUD), on the other hand, continues to draw support from the Reserve Bank of Australia's (RBA) cautious outlook. The RBA board members decided to lower the Official Cash Rate for the first time since November 2020, by 25 basis points (bps) from 4.35% to 4.1% following the conclusion of the February policy meeting. In the post-meeting press conference, RBA Governor Michele Bullock, however, said that the board is alert to upside risks to inflation and that market pricing for two more quarter-point cuts this year was ambitious. Apart from this, the Chinese government's annual policy statement for 2025 supports the Aussie. 

According to the State Council’s annual rural policy blueprint, China will deepen rural reforms to revitalize the agriculture sector and strengthen food security in the face of US tariffs, an economic slowdown, and climate change. Furthermore, China's Premier Li Qiang said last week that China will direct more efforts to boosting consumption and lifting people's livelihoods. This, in turn, drives some flows towards antipodean currencies, including the AUD, and contributes to the bid tone surrounding the AUD/USD pair. That said, the Federal Reserve's (Fed) hawkish stance helps limit the USD losses and caps gains for spot prices. 

A slew of influential Fed officials remain wary of future interest rate cuts amid still-sticky inflation. Hence, the market focus will remain glued to the release of the US Personal Consumption Expenditure (PCE) Price Index on Friday – the Fed's preferred inflation gauge. The crucial data will be looked upon for fresh cues about the Fed's interest rate-cut path. This, in turn, will play a key role in influencing the near-term USD price dynamics and help in determining the next leg of a directional move for the AUD/USD pair. 

AUD/USD daily chart

Technical Outlook

From a technical perspective, last week’s breakout through the 0.6360-0.6365 supply zone and the emergence of fresh selling near the said resistance breakpoint favors bullish traders. Moreover, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the upside. 

That said, momentum beyond the 0.6400 mark is likely to confront stiff resistance near the 100-day Simple Moving Average (SMA), currently pegged near the 0.6415 region. Hence, it will be prudent to wait for some follow-through buying beyond the said barrier before positioning for a move toward reclaiming the 0.6500 psychological mark for the first time since early December. The positive momentum could extend further towards testing the very important 200-day SMA, around the 0.6555-0.6560 zone. 

On the flip side, the 0.6330 area now seems to protect the immediate downside ahead of the 0.6300 round-figure mark. A convincing break below the latter could drag the AUD/USD pair further towards intermediate support near the 0.6265 region en route to the 0.6240-0.6235 zone. Some follow-through selling might shift the near-term bias back in favor of bearish traders. Spot prices might then weaken further below the 0.6200 mark, towards the 0.6145 support before eventually dropping to the sub-0.6100 levels, or the year-to-date low touched earlier this month.