- AUD/USD forecast remains subdued amid sour risk sentiment.
- Fed meeting minutes show no hint of aggressive easing.
- Australian PMI data shows a surge in economic activity
The AUD/USD forecast remains bearish on Thursday as the pair slides to 0.6420 during the European session. The price stays around the weakest level in two months after posting four consecutive days of losses. The risk sentiment remains fragile ahead of Fed Chair Powell’s speech at the Jackson Hole Symposium.
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The market participants are closely watching the annual event, which is expected to provide critical guidance on the Fed’s September policy decision. Traders anticipate a 25 bps rate cut, which would be the first rate cut of 2025, lowering the benchmark rate from 4.25% to 4.0%. The Fed’s stance came under intense criticism as US President Trump urged a deeper cut to as low as 1%. He argued that elevated rates are weighing on the government debt servicing and housing demand.
Recent US data reveals a mixed picture. The US inflation rose to 2.7% in July, with core inflation surging to 3.1% while producer prices went up to 3.6%. Meanwhile, the labor market showed softness, reinforcing the uncertainty around the Fed’s policy. FOMC meeting minutes for July revealed that most of the Fed officials were concerned about the rising inflation and trade tariffs, shedding off bets for aggressive easing.
On the Australian side, preliminary August PMI data showed resilience, with the Composite PMI rising to 54.9 from 53.8 in July—stronger activity in both manufacturing and services. However, failed to shield the Aussie from broad USD strength and risk-off flows.
Key Events for AUD/USD
Looking ahead, traders will closely monitor the release of US flash PMIs and the Philadelphia Fed Manufacturing Index later today. Still, Powell’s Jackson Hole remarks are likely to set the tone for AUD/USD, determining whether the pair extends losses or finds near-term support.
AUD/USD technical forecast: Bears aiming for 200-MA
The AUD/USD 4-hour chart shows the price is weak near the key support at 0.6420. In case of a breakout, the pair could extend losses further to test the 200-period MA at 0.6380. Below the level could further attract selling towards 0.6300. The RSI staying under 40.0 shows a solid bearish trend, with more cushion to the downside as the index is still above the oversold zone.
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On the flip side, moving above the 20-period SMA at 0.6490 could shift the trend to the upside with an immediate hurdle at 0.6550 ahead of 0.6600.
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