AUD/USD eyes 0.6500 hurdle as US Dollar weakens, RBA decision looms

• AUD/USD trades near 0.6455, up 0.80% on the day in the middle of broad United States Dollar weak point.
• Moody’s downgrade of the United States credit score weighs on the Greenback.
• RBA anticipated to cut rates by 25bps on Tuesday, market concentrate on assistance in the middle of durable domestic information.

The Australian Dollar (AUD) extends its rebound versus the United States Dollar (USD) on Monday, with AUD/USD reaching 0.6455, cutting current losses as belief turns versus the Greenback. The relocation follows Moody’s Score reduced the United States long-lasting sovereign score from “Aaa” to “Aa1,” pointing out installing financial obstacles and a $36 trillion financial obligation load. Although the company appointed a “Steady” outlook, the downgrade activated restored weak point in the United States Dollar, pressing the United States Dollar Index (DXY) near the essential 100.00 mark.

On the other hand, the focus moves to Tuesday’s Reserve Bank of Australia (RBA) policy choice. There is strong agreement throughout monetary markets and significant banks that the RBA will decrease the Authorities Money Rate (OCR) by 25 basis points, from 4.10% to 3.85%. Experts at ANZ, Commonwealth Bank, and Westpac support this view. Nevertheless, National Australia Bank (NAB) has actually taken a more aggressive position, anticipating a 50 basis point cut. Some economic experts have actually even drifted the possibility of a 35 basis point decrease to straighten the rate with a basic quarter-point level. A Reuters survey reveals a near-unanimous projection for a 25 basis point cut.

Nevertheless, positive Australian labor market information and enhancing US-China trade belief have actually tempered expectations for an aggressive relieving cycle.

Technical Analysis: AUD/USD eyes breakout above essential resistance

From a technical viewpoint, AUD/USD is approaching the 0.6500 mental resistance zone, which has actually topped the set’s advantage several times in Might. An everyday close above this barrier would unlock to more gains towards 0.6600, a level not seen considering that November.

The set stays supported by the 21-day Exponential Moving Typical (EMA) at 0.6402, strengthening the bullish short-term predisposition. The Relative Strength Index (RSI) at 56.69 programs modest upward momentum, while the Moving Typical Merging Divergence (MACD) continues to hover in favorable area, although momentum is flattening.

On the drawback, essential assistance is seen at 0.6400, marked by the 21-day Exponential Moving Typical (EMA), followed by a more powerful flooring at 0.6350. The near-term predisposition stays very carefully bullish as long as the set holds above the 0.6400 assistance zone.