US Dollar Forecast: AUD/USD Falls Toward September Low

US Dollar Outlook: AUD/USD

AUD/USD trades to a fresh monthly low (0.6653) as it gives back the rebound from last week, and the exchange rate may extend the decline from the start of the month if it fails to defend the September low (0.6622).

US Dollar Forecast: AUD/USD Falls Toward September Low

AUD/USD seems to be unfazed by the larger-than-expected rate cut by the People’s Bank of China (PBoC) as it snaps the recent series of higher highs and lows, and the broader recovery in the US Dollar may continue to drag on the exchange rate as Federal Reserve officials endorse a gradual approach in achieving a neutral policy.

US Economic Calendar

In turn, signs of a growing dissent within the Federal Open Market Committee (FOMC) may continue to sway foreign exchange markets amid waning speculation for another 50bp rate cut, and it remains to be seen if the central bank will further adjust the forward guidance for monetary policy as the economy shows little indications of an imminent recession.

With that said, AUD/USD may struggle to retain the advance from the yearly low (0.6349) if it fails to defend the September low (0.6622), and a move below 30 in the Relative Strength Index (RSI) is likely to be accompanied by a further decline in the exchange rate like the price action from earlier this year.

AUD/USD Price Chart – Daily

Chart Prepared by David Song, Strategist; AUD/USD on TradingView

• AUD/USD may attempt to test the September low (0.6622) as it extends the decline from the start of the month, with a break/close below the 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement) zone bringing the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) region on the radar.
• Next area of interest comes in around 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension) but AUD/USD may attempt to retrace the decline from the start of the month should it hold above the September low (0.6622).
• Need a move back above 0.6740 (38.2% Fibonacci retracement) to open up the 0.6810 (23.6% Fibonacci extension) to 0.6820 (23.6% Fibonacci retracement) region, with a breach above 0.6870 (38.2% Fibonacci retracement) raising the scope for a move towards the 0.6920 (50% Fibonacci retracement) to 0.6930 (23.6% Fibonacci retracement) area.

Additional Market Outlooks

US Dollar Forecast: USD/JPY Vulnerable on Failure to Test August High

USD/CAD Rally Eyes August High as RSI Pushes into Overbought Zone

British Pound Forecast: GBP/USD Susceptible to Test of September Low

EUR/USD Outlook Hinges on ECB Interest Rate Decision

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong