Welcome to Extreme Investor Network, where we bring you the latest insights and analysis on the stock market, trading, and all things Wall Street. Today, we are diving into the current probabilities of the Fed leaving interest rates unchanged in September, as well as what it means for the AUD/USD currency pair.
According to the CME FedWatch Tool, the probability of the Fed keeping interest rates at 5.5% in September was at 35.6% on April 18, up from 31.0% on April 11. This indicates a slight increase in the likelihood of a steady interest rate policy from the Fed.
In the short-term, the trends for the AUD/USD pair will be influenced by various factors such as FOMC member commentary, Australian consumer price trends, and stimulus measures from Beijing. Any signs of softer Australian inflation coupled with hawkish Fed chatter could strengthen the US dollar against the Australian dollar. However, a potential fiscal stimulus package from Beijing could offset the impact of softer inflation on the Reserve Bank of Australia’s rate path.
Looking at the AUD/USD price action on the daily chart, we see that the pair has remained below the 50-day and 200-day EMAs, indicating a bearish trend. A breakout above the resistance level at $0.64582 could pave the way for a test of the $0.65 handle, with the 50-day EMA coming into play.
On the other hand, a breakdown below the $0.64 handle could lead to a drop towards the support level at $0.62713. With a 14-period Daily RSI reading of 37.99, there is a possibility of the AUD/USD sliding towards the $0.63500 handle before reaching oversold territory.
As traders, it’s important to keep an eye on developments in China, geopolitical risks, and upcoming speeches from Fed officials, as these factors can impact the direction of the AUD/USD pair. Stay tuned to Extreme Investor Network for more updates and analysis on the stock market and trading strategies. Happy investing!
