The AUD/USD pair climbed to 0.6192 midweek, reflecting cautious optimism in the market. Traders remain vigilant ahead of key December inflation data from the US, which could influence expectations regarding the Federal Reserve’s potential interest rate cuts in 2025. Earlier, the Australian dollar recovered some of its losses as the US dollar reacted to Producer Price Index statistics.
Key upcoming events for the AUD
Australia will release its employment report on Thursday, a critical data point for assessing the state of the labour market. These figures are crucial for adjusting forecasts concerning the Reserve Bank of Australia’s (RBA) interest rate trajectory.
Fresh Q4 2024 inflation data for Australia will also be published at the end of the month. These data will be pivotal in shaping expectations for the RBA’s upcoming meeting and its decisions on borrowing costs.
Investors currently assign a 70% probability of a rate cut at the RBA’s February meeting. If realised, the rate could decrease by 25 basis points from the current 4.35% per annum. Market prices have already factored in this potential decision.
However, lingering uncertainty about the RBA’s future policy direction and the terminal rate target for the year keeps investors cautious, limiting the AUD’s upside potential.
Technical analysis of AUD/USD
On the H4 chart, AUD/USD is developing an upward wave targeting 0.6211. This level is expected to be tested today, followed by a potential decline towards 0.6161. A consolidation range is likely to form around 0.6161. If the pair breaks upwards from this range, a correction to 0.6290 could materialise. Conversely, a downward breakout could trigger a new wave targeting 0.6116. The MACD indicator supports this scenario, with its signal line below the zero mark but pointing sharply upwards.
On the H1 chart, the pair is building a growth wave towards 0.6211, which is expected to be reached today. Following this, a corrective move to 0.6161 may occur. The Stochastic oscillator confirms this scenario, with its signal line above the 50 mark and trending upwards towards 80.
Conclusion
The Australian dollar’s recent recovery is tempered by uncertainty surrounding the RBA’s future policy decisions. Key domestic data, including employment figures and Q4 inflation, heavily influence market expectations. While technical indicators suggest short-term growth potential for AUD/USD, further gains will depend on clarity regarding the RBA’s policy trajectory and broader economic conditions.
Before you enter foreign exchange and stock markets, you have to remember that trading currencies and other investment products is trading in nature and always involves a considerable risk. As a result of various financial fluctuations, you may not only significantly increase your capital, but also lose it completely. Therefore, our clients have to assure RoboForex that they understand all the possible consequences of such risks, they know all the specifics, rules and regulations governing the use of investment products, including corporate events, resulting in the change of underlying assets. Client understands that there are special risks and features that affect prices, exchange rates and investment products.
Recommended Content
Editors’ Picks

AUD/USD: Gains capped by 0.6300 so far
AUD/USD succumbed to the selling pressure and receded to the 0.6230 zone after briefly piercing the key 0.6300 hurdle on the back of a choppy session in the US Dollar.

EUR/USD looks bid and near 1.0400
EUR/USD extended its weekly recovery and revisited the area above the 1.0400 level, although the move lacked follow through, with the pair eventually slipping back to the 1.0380 region in the wake of the closing bell on Wall Street.

Gold picks up pace above $2,900, Dollar weakens further
Extra selling bias in the Greenback now prompts Gold prices to regain the $2,900 mark per ounce troy and above despite the steady climb in US yields across the board.

BNB price enters 7-day winning streak as Binance liquidates over $5.9 billion from BTC, ETH and SOL holdings
Binance Coin (BNB) price surged past $650 on Wednesday, marking a 15% increase over seven consecutive days of profit. Market reports suggest that recent trades executed by Binance’s parent company could drive further BNB price gains.

How the European Union could counter US tariffs
With Trump ordering a 25% import tax on all steel and aluminium entering the US, trade tensions are inching closer to Europe. We take a closer look at how European policymakers could react. Spoiler alert: it's complicated.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.