Read the full USD/JPY forecast, including chart setups and trade ideas.

As traders lower bets on an October BoJ policy adjustment, uncertainty lingers over the RBA’s rate path, spotlighting AUD/USD.

Aussie Inflation and the Aussie Dollar in the Spotlight

Turning focus to the AUD/USD pair, Aussie inflation and labor market data are clouding the RBA’s rate path. Australian ANZ-Indeed job ads slid 3.3% month-on-month in September, accelerating from a 0.3% drop in August. The job ad slump followed August’s sharp drop in full-time employment, signaling a deteriorating labor market. A softer labor market may curb wage growth, dampening inflation.

However, recent inflation figures have raised doubts about a November RBA rate cut, fueling monetary policy uncertainty. The Aussie Monthly CPI Indicator rose to 3% in August, reaching the top end of the RBA’s 2-3% target range, up from 2.8% in July. While recent labor market data has weighed on the Aussie dollar, AUD/USD remains above August levels, underscoring uncertainty over the timing of an RBA rate cut.

On Friday, October 10, RBA Governor Michele Bullock may share views on recent data and the RBA’s policy stance.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Weaker Aussie data, dovish RBA rhetoric, and rising trade tensions may drag AUD/USD toward the 50-day EMA and $0.655.
• Bullish AUD/USD Scenario: Stronger Aussie data, hawkish RBA cues, and easing trade friction could drive AUD/USD toward $0.66.

See our full AUD/USD analysis for detailed trends and trade setups.

US Politics, Fed Speakers, and Interest Rate Differentials

While Aussie economic data continues to fuel speculation about an RBA rate cut, developments on Capitol Hill and Fed speakers will also influence AUD/USD trends.

Another failed Senate vote and growing calls for back-to-back Fed rate cuts in October and December would narrow the US-Aussie rate differential, favoring the Aussie dollar. A narrower rate differential would likely drive AUD/USD toward $0.66. A sustained move above $0.66 could bring $0.665 into play.

On the other hand, a US government reopening and rising support to delay monetary policy easing could widen the rate differential, favoring the US dollar. A wider rate differential may push AUD/USD toward the 50-day EMA and $0.655. If breached, $0.65 would be the next key support level.