The AUDUSD currency pair faced a setback at an important trendline after the FOMC’s decision and dropped further due to a slightly disappointing Australian jobs report. Now, all eyes are on upcoming economic data from the US. Initially, the USD weakened following the Fed’s decision but later bounced back. This recovery happened as the market absorbed the Fed’s actions, which appeared more aggressive than expected. According to the FOMC dot plot, a slim majority of officials anticipate two more rate cuts in 2025, while some expect only one or none. For 2026, the Fed forecasts just one rate cut, which is fewer than the three cuts the market had been predicting.

Fed Chair Powell’s Remarks

Fed Chair Powell described the rate cut as a way to manage risks amid slowing labor market data. Future job reports will influence expectations around rates. Strong data could help strengthen the dollar, while weak data might keep it under pressure. The RBA recently lowered interest rates by 25 basis points but provided limited guidance on future cuts. Although the jobs report was somewhat weaker, the unemployment rate stayed stable. Market expectations suggest an 82% chance of no rate cut in the next meeting and a 30 basis points cut by year-end. Charts indicate key support and resistance levels, where buyers and sellers are strategizing. We expect the latest US Jobless Claims figures today.

Post Federal Reserve Meeting Analysis

After the Federal Reserve’s meeting on September 17, 2025, the US dollar gained strength as traders processed the new rate projections. The dot plot revealed that a narrow majority of officials expects only two more rate cuts in 2025, fewer than the market anticipated. This indicates a more cautious stance from the Fed, which supports the dollar. This cautious outlook is reasonable, even as the last two Non-Farm Payroll reports showed some weakness—with August’s figure being a modest 160,000. Core inflation remains stubbornly high at 3.1% year-over-year, signaling that the Fed wants to see more cooling before making further cuts. Today’s initial jobless claims data of 225,000 reflects a moderating labor market, not a collapsing one. Meanwhile, the Reserve Bank of Australia is also watching its labor market after cutting rates earlier this month. The latest jobs data showed the unemployment rate steady at 4.0%, which means there’s no immediate urgency for the RBA to cut rates again soon. Current market pricing shows about a 30-basis-point cut anticipated by the end of the year. This difference in policy outlooks is pushing the AUD/USD pair downward from its key trendline resistance, and our focus now shifts to the major upward trendline support. We can expect increased volatility in the coming weeks, especially around upcoming US data releases. Looking back at similar situations in late 2024, surprising US inflation or jobs data triggered sharp moves in this pair. For traders expecting more economic strength in the US, buying AUD/USD put options could be a smart move. A drop below the current trendline support around 0.6580 would likely lead towards the 0.6350 level. Using puts with a strike price near 0.6550 helps limit risk while betting on this downward trend. On the other hand, if we see upcoming US data, like the CPI report, fall short of expectations, the dollar may drop. In that case, the current dip towards trendline support could be a buying opportunity. We might consider purchasing call options or selling put spreads around the 0.6635 support zone to prepare for a rally back towards recent highs. Create your live VT Markets account and start trading now.

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