AUD/USD Intraday Bullish Push Confronts Key Resistance Amid Dovish Fed Expectations & US-China Trade Optimism - Analysis & Forecast

AUD/USD navigates a complex landscape, exhibiting strong intraday bullish momentum that is now challenging significant overhead resistance. The overall bias leans Neutral to Cautiously Bullish, fundamentally underpinned by increasing expectations for Federal Reserve rate cuts and improving US-China trade sentiment. These factors are currently offsetting concerns over China's slightly weaker Q3 GDP growth and rising RBA rate cut bets. While short-term technicals favor further upside, higher timeframe charts indicate a persistent range-bound environment. Critical US inflation and manufacturing data later this week pose substantial event risk, with the potential to override current technical structures and dictate the pair's near-term direction.

Technical Analysis

Multi-Timeframe Market Structure

The daily chart for AUD/USD indicates a ranging market, lacking a strong directional trend, evidenced by an ADX reading below 20. Price trades below the EMA20 (0.65350) and EMA50 (0.65483), suggesting medium-term bearish pressure, yet finds robust support from the EMA200 at 0.64976. The negative MACD and neutral-bearish RSI at 44.92 reinforce the absence of a sustained bullish trend on this timeframe. This aligns with the fundamental narrative of mixed signals, where positive trade news and Fed dovishness are countered by underlying economic concerns.

On the H4 timeframe, the market also lacks a strong trend, with ADX just below 20. Price has recently made a bullish advance, pushing above the EMA20 (0.65000), but struggles to clear the EMA50 (0.65140) and EMA200 (0.65508), which are acting as formidable overhead resistance. The Stochastic is in the overbought region (92.47), signaling potential for exhaustion or a pullback, even as MACD shows slight positive momentum. This technical picture reflects the market's current indecision, with buyers pushing against well-established resistance, a condition influenced by the anticipation of significant US economic data.

The H1 and M30 charts demonstrate a unified short-term bullish bias, with price positioned above both the EMA20 and EMA50. On M30, price is above EMA20, EMA50, and EMA200, indicating strong short-term alignment. Both MACD and RSI confirm robust bullish momentum, with H1 RSI at 65.41 and M30 RSI at 65.18. However, the H1 chart shows price approaching the EMA200 at 0.65159, which acts as immediate resistance, aligning with the current M30 SAR at 0.65200. H1 Stochastic is overbought at 83.74, suggesting the current bullish push may consolidate or retrace before further advances. The market's entry into the Asian session typically sees reduced volatility and range-bound price action after significant moves, which could lead to consolidation around these resistance levels.

Critical Price Levels & Momentum Assessment

Resistance:

• 0.65159 (H1 EMA200, immediate intraday resistance) - A break above this level is crucial for the continuation of short-term bullish momentum, potentially fueled by sustained USD weakness.
• 0.65200 (M30 SAR, short-term resistance) - Confluence with the H1 EMA200 reinforces this as a key battleground for buyers.
• 0.65508 (H4 EMA200, significant structural resistance) - A clear breach of this level would signal a more substantial shift in medium-term sentiment, potentially driven by a stronger dovish pivot from the Fed.

Support:

• 0.65140 (H4 EMA50, immediate intraday support) - This dynamic support level could hold during minor pullbacks, especially if US-China trade optimism persists.
• 0.65062 (H1 EMA20, dynamic support) - A break below this suggests weakening intraday bullish conviction.
• 0.64976 (D1 EMA200, strong long-term structural support) - This level represents a critical inflection point; its resilience is fundamentally supported by the underlying demand for AUD on global risk sentiment improvements.

Momentum indicators show a clear conflict: higher timeframes (D1, H4) are ranging with no strong trend, exhibiting mixed signals. Lower timeframes (H1, M30) show strong bullish momentum, with ADX indicating a developing trend. This short-term strength is tempered by overbought Stochastic readings and proximity to higher timeframe resistance. The overall market phase is Ranging/Transitional. Current H1 ATR is 0.000671 (6.7 pips) and M30 ATR is 0.000315 (3.15 pips), indicating relatively low intraday volatility.

Fundamental Market Drivers

Central Bank Policy & Economic Outlook

The fundamental backdrop for AUD/USD is currently shaped by diverging central bank expectations and shifting global economic narratives. In the United States, the Federal Reserve is widely anticipated to implement further monetary easing. Markets are almost fully pricing in a 25-basis-point rate cut in October, with a high probability of another reduction by December. This dovish sentiment is largely fueled by the ongoing US government shutdown, which delayed the release of critical economic data, including the Consumer Price Index (CPI) report, and reinforces expectations for a more accommodative Fed policy. A weaker US Dollar, driven by these rate cut expectations, provides a significant tailwind for the Australian Dollar.

For Australia, the Reserve Bank of Australia (RBA) faces increasing pressure to ease monetary policy. Recent unemployment data showed a rise to 4.5%, a four-year high, which strengthens market bets on RBA rate cuts. This domestic economic weakness presents a headwind for the AUD, potentially capping its upside even amid a weaker USD. RBA Governor Bullock's upcoming speech will be closely monitored for any guidance on the RBA's policy trajectory.

China's economic performance remains a pivotal factor for the Australian Dollar, given Australia's heavy reliance on commodity exports to China. The latest data indicates that China’s GDP grew by 4.8% year-on-year in the third quarter, a deceleration from 5.2% in the previous quarter. While the quarterly growth of 1.1% slightly exceeded expectations, and industrial production (6.5% YoY) along with retail sales (3%) showed resilience, the overall slower GDP momentum could limit the AUD's upside potential in the medium term. However, the People’s Bank of China (PBOC) has maintained its rates, signaling confidence in the domestic recovery without immediate fresh stimulus.

Market Sentiment & Risk Environment

Global market sentiment has improved significantly, providing crucial support for risk-sensitive currencies like the Australian Dollar. This optimism is primarily driven by renewed hopes of easing trade tensions between the United States and China. Recent comments from US President Donald Trump, indicating that high tariffs are "not sustainable" and confirming a planned meeting with Chinese President Xi Jinping, have been interpreted as a de-escalation in the trade conflict. This prospect of renewed bilateral dialogue directly benefits China-linked assets, and by extension, the Australian economy due to its high exposure to China's trade. The Australian Prime Minister's visit to the US, focusing on mutual cooperation in critical minerals, trade, and regional security under the AUKUS pact, further enhances the positive sentiment around the Australian economy and its currency. This improved risk appetite aligns with the intraday bullish technical momentum observed in AUD/USD.

Integrated Trading Execution

Primary Trading Scenario

• Bias: Bullish - The prevailing intraday bullish momentum, combined with a dovish Federal Reserve outlook and improving US-China trade relations, supports a continuation of the upward trajectory.
• Trigger/Entry: A decisive break and H1 candle close above 0.65160 (just above H1 EMA200 and M30 SAR). This confirms the continuation of intraday bullish momentum beyond immediate resistance, potentially driven by further USD weakness or positive headlines regarding US-China trade.
• Stop-Loss: Place stop below the H1 EMA20 at 0.65050. This provides a 1.5x H1 ATR buffer, aligning with the EMA20 and offering protection against a false breakout.
• Profit Targets:
  • Target 1: 0.65250 (Previous H4 high region, R:R ~1:1) - This target aligns with a logical technical resistance point and could be achieved as the market digests the current positive sentiment.
  • Target 2: 0.65350 (D1 EMA20, R:R ~1:2) - A more ambitious target, requiring sustained bullish pressure and potentially further confirmation of Fed dovishness or strong risk-on flows.
• Session Context: This scenario is more probable during the London or early New York session when liquidity increases, allowing for a sustained breakout. Asian session breakouts tend to be less reliable.

Alternative Market Scenario

• Invalidation: Primary scenario is invalidated if price fails to break 0.65160 and instead closes below 0.65130 (H4 EMA50 and recent H1 support). This could be triggered by a shift in risk sentiment or unexpected hawkish comments from the RBA.
• Bias: Neutral to Bearish (short-term) - A failure to sustain bullish momentum at resistance, coupled with potential profit-taking, points to a short-term correctional phase.
• Trigger/Entry: A H1 candle close below 0.65130, confirming rejection of higher prices and a pullback.
• Stop-Loss: Place stop above the high of the breakdown candle, or at 0.65190, providing a 1.25x H1 ATR buffer.
• Profit Targets:
  • Target 1: 0.65060 (H1 EMA20, R:R ~1:1) - This target represents a retest of immediate dynamic support.
  • Target 2: 0.64990 (D1 EMA200/H1 EMA50 confluence, R:R ~1:2) - This target aligns with strong structural support, a level that would require significant bearish momentum to break.
• Session Context: This scenario could unfold during the Asian session, characterized by lower volatility and potential profit-taking after the preceding bullish move, or as a reaction to RBA Governor Bullock's speech.

Risk Management & Catalyst Analysis

Trade Risk Assessment

The confluence quality for the current AUD/USD setup is Medium. While H1 and M30 timeframes display strong bullish momentum, this directly contradicts the ranging and slightly bearish bias observed on D1 and H4 charts. Overbought conditions on shorter timeframes further suggest caution, as they increase the probability of a pullback or consolidation before further advances. Intraday-specific risks include the transition into the Asian session, which often presents lower liquidity and can lead to false breakouts or extended consolidations. The proximity to higher timeframe resistance levels significantly increases the risk of reversal or price rejection. Position sizing should incorporate H1 ATR (0.000671) for stop-loss calculation, with a 1.25x ATR stop-loss recommended for intraday precision. While no high-impact events are scheduled within the immediate 4-hour window, traders must remain vigilant for any unexpected headlines during the thin Asian session, as these could quickly invalidate current setups.

Economic Calendar & Event Impact

The upcoming economic calendar features several high-impact events that will significantly influence AUD/USD, particularly on the USD side:

• US Existing Home Sales (October 23, 14:00 UTC): Forecast 4.06M, Previous 4.00M - Medium impact for USD, providing insight into the health of the US housing sector.
• AU RBA Gov Bullock Speaks (October 24, 00:05 UTC): Medium impact for AUD - Any remarks on monetary policy, inflation, or economic outlook could influence RBA rate cut expectations and AUD direction.
• US Core CPI m/m (October 24, 12:30 UTC): Forecast 0.3%, Previous 0.3% - High impact for USD, critical for inflation expectations and Federal Reserve policy outlook. A higher-than-expected reading could temper dovish Fed bets.
• US CPI m/m (October 24, 12:30 UTC): Forecast 0.4%, Previous 0.4% - High impact for USD, alongside Core CPI, providing a comprehensive view of consumer price inflation.
• US CPI y/y (October 24, 12:30 UTC): Previous 2.9% - High impact for USD, the annual inflation rate is a key determinant for long-term Fed policy.
• US Flash Manufacturing PMI (October 24, 13:45 UTC): Forecast 51.9, Previous 52.0 - High impact for USD, a leading indicator for manufacturing sector health. Stronger data could alleviate some Fed dovishness.
• US Flash Services PMI (October 24, 13:45 UTC): Forecast 53.5, Previous 53.9 - High impact for USD, a key indicator for the dominant services sector. Resilience here could also challenge aggressive Fed rate cut expectations.
• US Revised UoM Consumer Sentiment (October 24, 14:00 UTC): Forecast 55.0, Previous 55.0 - Medium impact for USD, gauges consumer confidence, which influences spending.

The cluster of high-impact US CPI and PMI data on October 24th will likely introduce significant volatility and could override any prevailing technical setups. Caution is strongly advised as these events approach.

Synthesized Market Outlook

AUD/USD faces a pivotal period, with its current intraday bullish momentum testing significant technical resistance levels. The fundamental narrative of a dovish Federal Reserve, driven by rate cut expectations and the US government shutdown, provides a strong underlying tailwind for the Australian Dollar. This is further bolstered by improving US-China trade sentiment, which enhances global risk appetite and directly benefits Australia's economy. However, domestic RBA rate cut bets, fueled by rising unemployment, and China's slightly decelerating GDP growth present counteracting forces that could cap the AUD's upside in the medium term.

Traders should monitor the 0.65159 and 0.65200 resistance levels closely for a decisive break, which would confirm short-term bullish continuation. Conversely, a failure to clear these hurdles, potentially triggered by unexpected comments from RBA Governor Bullock or a shift in risk sentiment, could lead to a pullback towards 0.65130 and 0.64976. The upcoming high-impact US economic data on October 24th, particularly the CPI and PMI figures, are critical catalysts that will likely introduce substantial volatility and redefine near-term direction, potentially overriding current technical structures.