AUD/USD slides to a new low for 2024 as markets brace for a widely anticipated hawkish rate cut by the Fed

AUD/USD has reached a new low for 2024, trading near its lowest level since October 2023 on Thursday, following a strong bearish signal generated by Tuesday’s close below the previous annual low (0.6348, August 5 spike low).

The Australian dollar remains pressured by slower-than-expected growth in the Chinese economy and declining commodity prices, compounded by expectations of a hawkish rate cut from the Fed today, further exacerbating the negative outlook.

The U.S. central bank is widely expected to reduce interest rates by 25 basis points during today’s policy meeting, though markets anticipate a significant downgrade in the Fed’s 2025 projections (possibly to two rate cuts from the initially planned four), due to elevated inflation and a relatively strong economy.

Additionally, indications that Trump’s administration will focus on boosting the U.S. economy require increased caution, as stronger economic growth could fuel inflation and prompt the central bank to maintain a vigilant stance, adjusting its policy accordingly.

The pair is on track for a sustained break below the 0.6348 pivot, which could pave the way for testing the 2023 low (0.6270) and potentially expose the 2022 low (0.6170) in a stronger bearish momentum.

The firmly bearish daily studies (with negative momentum intensifying and moving averages aligned in a bearish setup, including a converging 100/200 DMA potentially forming a Death Cross) support this outlook, with limited short-term recoveries expected to be contained under overbought conditions.

The 10-day moving average (0.6377) should ideally act as a cap, with any extended gains stalling below the 0.6430/40 zone (falling 20DMA/former low of November 14), maintaining the bearish momentum.

Res: 0.6348; 0.6377; 0.6440; 0.6465
Sup: 0.6300; 0.6270; 0.6100; 0.6170