FX.co ★ iMeta | AUD/USD

The pair is currently navigating a turbulent landscape, facing multiple headwinds that could further hinder its performance. Bearish technical indicators, coupled with ongoing geopolitical tensions, have created a challenging environment for the Australian Dollar. While easing inflation in the U.S. may provide some support for riskier currencies like the AUD, this potential upside is tempered by the safe-haven appeal of the U.S. Dollar. Inflation and Monetary Policy: Insights from the RBA: A key factor influencing the AUD’s movement is the monetary policy stance of the Reserve Bank of Australia (RBA). Minutes from the RBA's November meeting revealed that the central bank is in no rush to cut interest rates anytime soon. While some market participants had hoped for rate cuts, the RBA remains cautious and wants to keep its options open. The board members noted that they would continue to monitor economic conditions, particularly to see if there’s a pick-up in activity during the latter half of the year. Deputy Governor Andrew Hauser emphasized that tackling inflation remains a top priority. Technical Analysis of the AUD/USD: After briefly climbing to 0.6460, the pair quickly reversed, slipping into negative territory and marking its fifth consecutive day of losses. This persistent downtrend highlights the ongoing weakness of the Dollar. During the European trading session, the pair dropped further to 0.6443, a level not seen in nearly three weeks. With the pair now testing the 50-day Simple Moving Average (SMA), the overall sentiment remains pessimistic, suggesting that further declines could be on the horizon.

A move lower could see the pair testing the 200-day Exponential Moving Average (EMA) around 0.6565. If this level fails to hold, the next key resistance could be at the 0.6600 mark. Furthermore, the 14-day Relative Strength Index (RSI) is hovering near the 40.00 level, indicating that momentum is weakening, which could pave the way for further declines in the near term.