Australian Dollar Forecast: AUD/USD Awaits NAB Confidence Boost and RBA Signals

Aussie Business Sentiment in Focus

Australian business sentiment will influence buyer demand for the AUD/USD on Tuesday, October 8. Economists expect the NAB Business Confidence Index to increase from -4 in August to +2 in September.

Improved business sentiment could signal a pickup in investment and job creation. Tighter labor market conditions could boost wages and consumer spending. Upward trends in consumer spending may fuel demand-driven inflation, possibly delaying an RBA rate cut until 2025.

RBA Meeting Minutes and Board Member Commentary

Later in the Tuesday morning session, the RBA will release its Meeting Minutes from the September Monetary Policy Meeting. The Meeting Minutes may offer more insights into interest rate goals. Views on inflation, the labor market, and the conditions for an interest rate cut could move the dial.

Additionally, RBA Deputy Governor Hauser is on the calendar to speak. During the latest RBA press conference, RBA Governor Michele Bullock stated that headline inflation may come within the target range but may not reflect underlying inflation.

Reaction to August’s Monthly CPI Indicator and views on inflation will likely impact Aussie dollar demand. The Monthly CPI Indicator fell from 3.5% to 2.7%, within the RBA’s target range. Support for a Q4 2024 RBA rate cut may drive the AUD/USD toward $0.67.

US Economic Calendar: Consumer Sentiment and FOMC Member Speeches

Later in the Tuesday session, the focus shifts to the US economic calendar. Economists forecast the RCM/TIPP Economic Optimism Index to rise from 46.1 in September to 47.2 in October. A higher print could reinforce bets on the US avoiding an economic recession. Stronger consumer sentiment may boost private consumption, which accounts for over 60% of GDP.

Investors should also consider FOMC member speeches following the latest US Jobs Report. Upbeat US data and calls to delay Fed rate cuts could push the pair toward the $0.67 level.

Short-Term Forecast for AUD/USD

Near-term AUD/USD trends will likely hinge on central bank commentary, Aussie business and consumer sentiment, and the US CPI Report. Upbeat Aussie data could support expectations of an RBA policy hold through Q4 2024. However, RBA forward guidance will be crucial. Support for a Q4 2024 rate cut could send the AUD/USD toward $0.67.

From the US, softer-than-expected US inflation data may overshadow the Aussie stats, potentially pushing the AUD/USD toward $0.68500.

Investors should closely monitor central bank signals and economic indicators, which could influence AUD/USD trends. Beyond the economic calendar, news updates on the Middle East conflict also need monitoring. Risk aversion could retrigger a flight to safety, impacting commodity currencies, including the Aussie dollar.

AUD/USD Technical Analysis

Daily Chart: AUD/USD Breakout Intact

Despite Monday’s pullback, the AUD/USD remains above the 50-day and 200-day EMAs, sending bullish price signals.

A breakout from the $0.67500 level could give the bulls a run at the $0.68006 resistance level. Furthermore, a break above the $0.68006 resistance level may signal a move toward $0.68500.

Traders should consider the Aussie business sentiment data and central bank commentary, which may influence AUD/USD price movements.

Conversely, a fall through the 50-day EMA may give the bears a run at the $0.67050 support level.

With a 14-period Daily RSI reading of 45.76, the Aussie dollar may fall through the $0.67050 support level before entering oversold territory.