AUD/USD Forex Signal: Bullish Ahead of Fed Decision
2025-10-28 19:02:44
The Australian dollar (AUD) was primarily volatile against the U.S. dollar during the European trading session on Tuesday (October 28). With recent trade tensions easing and traders awaiting key events between the United States and Australia, the AUD/USD pair gapped higher at the open, climbing to its highest level since October 10. The pair rose from this month's low of 0.6440 to a high of 0.6563.
Australian dollar awaits key events
The Australian dollar has been on a strong upward trend against the US dollar over the past few days, driven by traders' optimism about progress in the US-China trade relationship. The two sides have reached a partial agreement, with the US likely to reduce existing tariffs on Chinese goods.
Trump also expressed higher expectations for his upcoming meeting with President Xi Jinping during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, where the two sides will discuss trade and other issues.
A mutually beneficial trade deal between China and the US would be a boon for the Australian dollar. China is a significant buyer of Australian goods, so a deal would directly boost demand for the Australian dollar while also weakening the dollar's safe-haven appeal.
The next key driver for the Australian dollar against the US dollar will be the Federal Reserve's interest rate decision on Wednesday, with investors expecting the Fed to cut interest rates by 0.25% and end quantitative tightening.
Two key data points boosted the odds of a Fed rate cut: a report on Friday showing U.S. inflation rose less than expected in September, and a report from Automatic Data Processing (ADP) showing the U.S. private sector shed more than 36,000 jobs in September.
Australia's most important data release is on Thursday, with the Bureau of Statistics releasing its latest inflation report for the third quarter. This report will inform the Reserve Bank of Australia's (RBA) decision-making at its meeting next week.
Technical Analysis
(AUD/USD daily chart source: Yihuitong)
The daily chart shows that the Australian dollar rebounded after hitting a low of 0.6440 against the US dollar on October 14. This low is an important support level and coincides with the rising trend line connecting the lowest fluctuation points since April this year.
The pair has broken above the 50-day exponential moving average (EMA), which suggests bulls are in control of the market. Furthermore, the relative strength index (RSI) has broken above a key level and is trending upwards.
Therefore, the most likely scenario for the Australian dollar against the US dollar is to continue its upward trend, with bulls targeting the next key resistance level of 0.6650.
Bullish view <br/>Buy the AUD/USD pair and set a take-profit level at 0.6650. Set a stop-loss level at 0.6450. Timeframe: 1-2 days.
Bearish view <br/>Sell AUD/USD currency pair and set the take-profit level at 0.6450. Set the stop-loss level at 0.6650.
At 19:01 Beijing time, AUD/USD was at 0.6559/60, up 0.08%.
Australian dollar awaits key events
The Australian dollar has been on a strong upward trend against the US dollar over the past few days, driven by traders' optimism about progress in the US-China trade relationship. The two sides have reached a partial agreement, with the US likely to reduce existing tariffs on Chinese goods.
Trump also expressed higher expectations for his upcoming meeting with President Xi Jinping during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, where the two sides will discuss trade and other issues.
A mutually beneficial trade deal between China and the US would be a boon for the Australian dollar. China is a significant buyer of Australian goods, so a deal would directly boost demand for the Australian dollar while also weakening the dollar's safe-haven appeal.
The next key driver for the Australian dollar against the US dollar will be the Federal Reserve's interest rate decision on Wednesday, with investors expecting the Fed to cut interest rates by 0.25% and end quantitative tightening.
Two key data points boosted the odds of a Fed rate cut: a report on Friday showing U.S. inflation rose less than expected in September, and a report from Automatic Data Processing (ADP) showing the U.S. private sector shed more than 36,000 jobs in September.
Australia's most important data release is on Thursday, with the Bureau of Statistics releasing its latest inflation report for the third quarter. This report will inform the Reserve Bank of Australia's (RBA) decision-making at its meeting next week.
Technical Analysis
(AUD/USD daily chart source: Yihuitong)
The daily chart shows that the Australian dollar rebounded after hitting a low of 0.6440 against the US dollar on October 14. This low is an important support level and coincides with the rising trend line connecting the lowest fluctuation points since April this year.
The pair has broken above the 50-day exponential moving average (EMA), which suggests bulls are in control of the market. Furthermore, the relative strength index (RSI) has broken above a key level and is trending upwards.
Therefore, the most likely scenario for the Australian dollar against the US dollar is to continue its upward trend, with bulls targeting the next key resistance level of 0.6650.
Bullish view <br/>Buy the AUD/USD pair and set a take-profit level at 0.6650. Set a stop-loss level at 0.6450. Timeframe: 1-2 days.
Bearish view <br/>Sell AUD/USD currency pair and set the take-profit level at 0.6450. Set the stop-loss level at 0.6650.
At 19:01 Beijing time, AUD/USD was at 0.6559/60, up 0.08%.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
