AUD/USD Bullish Reversal Looks Possible
The AUD/USD pair found temporary support and rose near 0.6420 during the European session on Monday (December 9) after posting a fresh four-month low near 0.6370 on Friday. The Australian currency pair recovered slightly as investors focused on the Reserve Bank of Australia (RBA) monetary policy decision, which will be announced on Tuesday.
Market experts expect the RBA to leave interest rates unchanged at 4.35% but will tone down its hawkish tone as Australia's Gross Domestic Product (GDP) growth in Q3 was weaker than expected, a scenario that would benefit the Australian Dollar (AUD).
Analysts at ANZ and Westpac expect the RBA to start cutting interest rates from May 2025. They had pushed back their forecast from March 2025 amid concerns over strong price pressures.
Meanwhile, the US Dollar (USD) moved higher despite traders' belief that the Federal Reserve (Fed) will cut interest rates by 25 basis points points (bps) to 4.25%-4.50% at the policy meeting on December 18. This week, investors will be looking at the US Consumer Price Index (CPI) data for November, due out on Wednesday.
The short-term trend of the AUD/USD pair is bearish as all the short-term to long-term Exponential Moving Averages (EMAs) are declining.
The 14-day Relative Strength Index (RSI) is moving down below 40.00, indicating that the bearish momentum is still intact.
Further declines towards the August low of 0.6348 and the round-level support of 0.6300 will emerge if the Australian currency pair fails to sustain a recovery above the round-level support of 0.6400.
On the other hand, a decisive recovery above the November 25 high of 0.6550 will push the asset towards the round-level resistance of 0.6600, followed by the September 11 low of 0.6622.
Source: FXStreet
