Investing in AUDUSD amid correction ahead of delayed US data releases

The AUDUSD currency pair continues to correct, trading near the 0.663 level. This downward movement was triggered by the Federal Reserve’s (Fed) rhetoric, which was less dovish than many had anticipated. The US central bank did cut interest rates, as was widely predicted, but Chair Jerome Powell’s comments, alongside those of some other policymakers, about further monetary easing cooled market expectations and supported the dollar, exerting pressure on the AUDUSD pair.

Meanwhile, recent reports from Australia highlight an issue of weak domestic demand. The Westpac Consumer Sentiment Index fell sharply in December, retreating into negative territory, as households grew increasingly concerned about stubbornly high inflation. The latter, in turn, poses a real threat of resuming the Reserve Bank of Australia’s (RBA) tightening cycle. However, some traders are skeptical, as the country’s economy has seen better days, as evidenced by the composite PMI index falling to a seven-month low. Rate hikes could worsen the situation even more. This factor prevents a deeper decline in AUDUSD.

Globally, investors are now taking a wait-and-see stance to navigate a period of ups and downs ahead of the release of delayed economic reports from the United States, including employment data. These readings could change market expectations regarding the Fed's future monetary path. Thus, the greenback is about to remain in a tight spot in the medium term, as traders forecast more rate cuts in 2026 than the US regulator does.

The technical setup points to a local bottom forming near 0.663, with a standoff between bulls and bears. The Chaikin Oscillator, while holding above zero, suggests that buying momentum is waning. Since prices are pretty high, the indicator’s decline shows that bulls are losing their grip on the market.

If current levels hold, consolidation is likely, with technical tension continuing to ease before another round of growth. However, if macroeconomic statistics from the US bring surprises, the correction may continue.

Keep in mind the trading strategy set out below:

Buy AUDUSD during a decline toward 0.66200, with Take profit at 0.66660 and Stop loss at 0.65950.

The forecast remains relevant between December 16 and December 23, 2025.