AUD/USD Price Analysis: Soars to near 0.6500 ahead of FOMC decision

The AUD/USD pair delivered a rally to near the psychological resistance of 0.6500 in the late European session. The Aussie asset picked strength after the People’s Bank of China (PBOC) kept its one-year and five-year Loan Prime Rate (LPR) unchanged at 3.45% and 4.20% respectively.

The PBoC was expected to maintain a dovish interest rate policy as the Chinese economy is under pressure due to upside deflation risks. Further policy expansion would support the economy to find footing amid a bleak economic outlook.

Meanwhile, the show-stopper event for the FX domain is the interest rate decision by the Federal Reserve (Fed). The US central bank is expected to keep interest rates unchanged at 5.25-5.50%. As the US inflation has been consistently falling while maintaining economic resilience, the Fed has the opportunity to skip the policy tightening regime for the second time in its current tightening cycle.

AUD/USD rebounds after discovering buying interest near the horizontal support plotted from August 17 low around 0.6364 on a two-hour scale. The Aussie asset stabilizes above the 20-day Exponential Moving Average (EMA), which trades around 0.6340. Potential resistance is plotted from August 15 high at 0.6522.

The Relative Strength Index (RSI) (14) jumps above 60.0, which indicates that the bullish impulse has been triggered.

A decisive break above August 15 high around 0.6522 will drive the asset to August 9 high at 0.6571. Breach of the latter will drive the asset towards August 10 high at 0.6616.

On the flip side, fresh downside would appear if the Aussie asset will drop below August 17 low around 0.6360. This would expose the asset to the round-level support of 0.6300 followed by 03 November 2022 low at 0.6272.

AUD/USD two-hour chart