The Federal Reserve meeting results indicate a high likelihood of either just one rate cut or even a pause, with the possibility of two cuts still on the table. If the US economy continues to improve and inflation gradually rises, the Fed will unlikely reduce rates before March.
Against this backdrop, the pair could resume its decline after a local upward correction. This likelihood is based on expectations that the Reserve Bank of Australia will continue lowering rates, shifting the overall interest rate differential between the US and Australia in favor of the US dollar. This dynamic could trigger a renewed drop in the pair.
Technical Picture and Trading Idea
The price is trading below the middle line of the Bollinger Bands and below the SMA 5 and SMA 14. The RSI is attempting to exit the oversold zone. The Stochastics remain in the oversold area.
The pair may recover to the 0.6270 level before reversing and falling to 0.6170.
