US Dollar Forecast: AUD/USD Fails to Push RSI Into Overbought Zone
US Dollar Outlook: AUD/USD
AUD/USD registers a fresh monthly high (0.6677) as Australia’s Consumer Price Index (CPI) shows a smaller-than-expected slowdown in underlying inflation, and the exchange rate may further retrace the decline from the August high (0.6724) as it continues to carve a series of higher highs and lows.
US Dollar Forecast: AUD/USD Fails to Push RSI Into Overbought Zone
Keep in mind, AUD/USD trades above the 200-Day SMA (0.6582) for the first time since July as it extends the advance from the start of the month, and fresh data prints coming out of the US may keep the exchange rate afloat amid signs of slowing price growth.
Join David Song for the Weekly Fundamental Market Outlook webinar. Register Here
US Economic Calendar
The update to the US Personal Consumption Expenditure (PCE) Price Index may sway AUD/USD as the core reading, the Federal Reserve’s preferred gauge for inflation, is expected to narrow to 3.5% in October from 3.7% per annum the month prior.
The development may keep the Federal Open Market Committee (FOMC) on the sidelines at its next interest rate decision on December 13 as inflation falls toward the central bank’s 2% target, but a higher-than-expected core PCE print may drag on AUD/USD as it puts pressure the Fed to pursue a more restrictive policy.
Until then, speculation surrounding US monetary policy may influence AUD/USD as Chairman Jerome Powell and Co. are slated to update the Summary of Economic Projections (SEP), while recent price action raises the scope for a further advance in the exchange rate as it extends the series of higher highs and lows from last week.
With that said, AUD/USD may continue to retrace the decline from the August high (0.6724) as it trades above the 200-Day SMA (0.6582) for the first time since July, but the Relative Strength Index (RSI) may show the bullish momentum abating amid the failed attempt to push into overbought territory.
AUD/USD Price Chart – Daily
Chart Prepared by David Song, Strategist; AUD/USD on TradingView
- AUD/USD extends the series of higher highs and lows from last week to register a fresh monthly high (0.6677), with the break/close above the 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement) region bringing the August high (0.6724) on the radar.
- Need a break/close above 0.6740 (38.2% Fibonacci retracement) to open up the 0.6810 (23.6% Fibonacci extension) to 0.6820 (23.6% Fibonacci retracement) area, but the Relative Strength Index (RSI) may show the bullish momentum abating as it seems to be reversing ahead of overbought territory.
- Failure to test the August high (0.6724) may curb the bullish price action in AUD/USD, with a breach below the 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement) region raising the scope for a move towards the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) zone.
Additional Market Outlooks
US Dollar Forecast: GBP/USD Breaks Above Channel Resistance
US Dollar Forecast: USD/JPY Struggles to Trade Back Above 50-Day SMA
--- Written by David Song, Strategist
Follow on Twitter at @DavidJSong
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.
GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2025