Ella 
AUD/USD struggled to gain any meaningful traction on Monday, remaining confined to a tight trading range during the Asian session. Spot prices are currently hovering below the mid-0.6400 level, still within striking distance of the nearly two-week high hit on Friday.
A broad rise in U.S. stock futures put the safe-haven U.S. dollar (USD) on the defensive and helped boost the risk-sensitive Australian dollar amid optimism that China will take more stimulus measures. The US dollar’s decline may further be attributed to some positioning ahead of the high-profile US Federal Monetary and Financial Markets Committee (FOMC) monetary policy meeting, which begins on Tuesday, and is seen as another factor providing some support for the AUD/USD pair. .
The U.S. central bank is due to announce its decision on Wednesday, and is widely expected to keep interest rates unchanged. However, the market still sees the possibility of another 25 basis points rate hike in November or December. The focus will therefore be on the accompanying policy statement. This statement, along with Fed Chairman Jerome Powell’s remarks at the post-meeting press conference, will be scrutinized for clues on the Fed’s path to future interest rate hikes, which will influence near-term U.S. dollar price dynamics.
At the same time, traders are likely to avoid making aggressive bearish bets around the dollar and brace for any meaningful corrective decline from the more than six-month high hit last week. In addition to this, speculation that the Reserve Bank of Australia (RBA) may have ended its rate hike cycle may further dampen the AUD/USD exchange rate. Therefore, it would be prudent to wait for strong follow-through buying to confirm that spot prices have bottomed.
There won’t be any relevant market economic data released on Monday, so AUD/USD will be influenced by USD price dynamics. Traders will further take cues from broader market risk sentiment to seize short-term opportunities. At the same time, the above-mentioned mixed fundamental background requires activist traders to remain cautious when facing the risk of key central bank events this week.
