AUD/USD Trade alert: Strong USD vs RBA's rate decision
Talk of a US$278 billion (1 trillion yuan) rescue package for Chinese shares might not be enough to support AUD/USD.
Countering this positive signal for the AUD is general US dollar strength, caused by a shift in the market regarding the likelihood of a March rate cut. At the turn of the year, it was priced above 80% probability, but that's now fallen to 42%.
On the daily chart, we can see the AUD/USD testing on the key support zone at 0.6550 with some consolidation just above this level before the next move.
Looking a little further ahead, AUD might find the upwards momentum it needs with Australia's inflation rate data released on January 30 next week, followed closely by the Reserve Bank of Australia's interest rate decision on February 5.
The inflation figure is the last major report the RBA will have to consider before it meets next week for its first interest rate decision of 2024. Will they keep their rate unchanged on February 5 or surprise the market with another 25-basis-points hike and give a pop to the AUD/USD?