Selling AUDUSD with 0.64800 target amid temporary dollar weakness and technical correction

The AUDUSD currency pair opened at 0.65377 on Tuesday, September 2, with a decline in early Asian trading following its previous five-day rally. Quotes were supported by a sudden drop in the US dollar, triggered by rising expectations of September’s rate cut by the Federal Reserve (Fed). The American currency was also pressured by Trump’s recent attempts to dismiss Fed Governor Lisa Cook, which raised questions about the central bank’s autonomy, and the court’s ruling about the illegality of the president's tariffs.

The Australian dollar, on the contrary, was underpinned by domestic statistics. The current account deficit shrank more than expected, while the manufacturing Purchasing Managers' Index (PMI) surged the most in three years. However, these positive data were partially offset by weak results for housing permits and sluggish growth in company inventories. This indicates a mixed economic recovery.

Friday’s employment data in the United States is likely to be the key driver for further AUDUSD movement. However, traders have already priced in a potential drop in job openings and a future rate cut by the Fed next month, limiting the dollar’s downside.

The technical setup indicated a moderate rise in AUDUSD over the week. The Stochastic Oscillator is nearing oversold territory but keeps climbing, with the %K line crossing above the %D one, signaling a resumption of upward movement. Both lines are over the 75 level, suggesting potential overbought conditions and the chance of an imminent correction.

Take into account the following trading strategy:

Consider selling AUDUSD at the current level (0.65350) to lock in profits when the price pushes off the resistance and falls from the overbought zone. Take profit: 0.64800. Stop loss: 0.65660.

This forecast remains valid from September 2 to September 9, 2025.