The AUDUSD pair rose after Federal Reserve Chair Powell made dovish comments. His remarks pushed the chance of a rate cut in September to about 82%, predicting a total of 54 basis points of easing by the end of the year. Traders are now looking ahead to the US Non-Farm Payroll (NFP) report, which could change interest rate expectations; strong data may lower the chance of a September rate cut to 50%, while weak data might increase support for further cuts by year-end. The Reserve Bank of Australia (RBA) recently reduced interest rates by 25 basis points. The market sees a 63% chance of no change at their next meeting and expects 36 basis points of easing by year-end. The latest Australian employment report was mostly in line with expectations, showing solid overall data.

Technical Analysis On The AUDUSD Pair

In technical analysis, the daily chart shows AUDUSD is caught between the upper trendline and a support zone around 0.6350. The 4-hour analysis indicates stability at the 0.6485 level, suggesting a bullish outlook if the price moves higher. The 1-hour chart shows that a breakout from this consolidation could strengthen the trend. Upcoming economic reports, like the US Consumer Confidence report and Australian Monthly CPI data, may further impact this market. Right now, the US dollar is weakening due to the Federal Reserve’s recent signals for potential policy adjustments. Derivative markets are suggesting an over 80% chance of a rate cut in September, largely influenced by recent inflation data showing the core PCE price index for July 2025 slowing to 2.7%. The jobs report will play a key role in confirming or disputing this expectation. On Australia’s side, the RBA is taking a cautious approach after earlier rate cuts and is now focused on its labor market. The latest monthly CPI data for July 2025 showed persistent inflation at 3.8%, making it less likely the RBA will cut rates again soon. This difference in policy is creating tension for the AUDUSD pair, with the Fed leaning towards easing while the RBA may need to hold steady.

Trading Strategy And Upcoming Events

Currently, we are stuck around the 0.6485 level, which is a key point for traders in the coming weeks. With major US data releases on the horizon, this consolidation indicates uncertainty ahead of a likely volatile move. Any derivative strategy should focus on a breakout from this zone. For traders, buying options to take advantage of the anticipated volatility could be wise, especially with expirations set after this Friday’s key US inflation data. A similar situation occurred before major NFP surprises in early 2024, where implied volatility surged right before a significant movement. A more cautious approach would be to wait for a confirmed break of the 0.6485 range before making directional trades with calls or puts. Create your live VT Markets account and start trading now.

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