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AUD/USD rallies to near 0.6500 as the PBoC maintains a dovish interest rate policy.
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The Fed is expected to keep interest rates unchanged at 5.25-5.50% as the US inflation has been consistently falling.
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AUD/USD rebounds after discovering buying interest near the horizontal support around 0.6364.
The AUD/USD pair delivered a rally near the psychological resistance of 0.6500 in the late European session. Australia’s asset strength picked up after the People’s Bank of China (PBOC) kept its one-year and five-year loan prime rates (LPR) unchanged at 3.45% and 4.20% respectively.
The PBoC was expected to maintain an accommodative interest rate policy as the Chinese economy remains under pressure due to upside inflation risks. Further policy expansion will help the economy find its footing amid a bleak economic outlook.
Meanwhile, the show-stopper event for the FX domain is the Federal Reserve’s (Fed) interest rate decision. The US central bank is expected to keep interest rates unchanged at 5.25-5.50%. As US inflation continues to decline while maintaining economic resilience, the Fed has a chance to avoid a second policy tightening cycle in the current tightening cycle.
AUD/USD rebounded after discovering buying interest near horizontal support plotted near 0.6364 on the two-hour scale since August 17. Australian assets stabilized above the 20-day exponential moving average (EMA), which is trading around 0.6340. Potential resistance is planned from August 15 at 0.6522.
The Relative Strength Index (RSI) (14) has jumped above 60.0, indicating that a bullish impulse has been triggered.
A decisive break above 0.6522 on August 15 would take the asset to an August 9 high of 0.6571. A breach of the latter would drive the asset to 0.6616 on August 10.
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
AUD/USD
