AUD/USD neutral as US GDP data misses expectations

• US Q4 GDP growth slows to 2.3%, missing estimates of 2.6%.
• Fed holds rates at 4.25%-4.50%, maintaining cautious stance on inflation progress.
• AUD/USD stands soft around 0.6235, RBA rate cut expectations limits upside.

The AUD/USD pair stands neutral around 0.6235 on Thursday, struggling to gain traction ahead of the US Q4 GDP data release. The Federal Reserve opted to keep interest rates steady but maintained a cautious tone, expressing concerns over stalled disinflation progress. Meanwhile, the Reserve Bank of Australia (RBA) is widely expected to shift toward a policy-easing stance in the coming month, further weighing on the Aussie.

US GDP misses forecasts, Fed holds rates steady

The latest US economic data showed that growth slowed in the final quarter of 2024. Preliminary figures revealed that GDP expanded at an annualized pace of 2.3%, falling short of the 2.6% consensus and marking a notable drop from the 3.1% growth seen in the previous quarter. The Personal Consumption Expenditures (PCE) price index jumped to 2.3%, reflecting stronger inflationary pressures, while core PCE remained steady at 2.2%, below expectations of 2.5%.
Additionally, US jobless claims declined more than expected, with initial claims falling to 207,000 from 223,000 the previous week, reinforcing the Fed's cautious stance on potential rate cuts. The central bank left rates unchanged as anticipated but removed language about inflation progress toward the 2% target, signaling a more watchful approach. Fed Chair Jerome Powell later clarified that this change was not intended to send a signal about policy direction, which slightly softened the initial hawkish interpretation.

Investors are closely monitoring upcoming economic data, particularly the US Personal Consumption Expenditures (PCE) report on Friday, for further clues on the Fed's policy trajectory. Meanwhile, sentiment around the Aussie remains weak as RBA rate cut bets intensify, with analysts at ANZ predicting a 25-basis-point reduction in February.

Technical overview

AUD/USD remains range-bound, showing limited upside momentum. The Relative Strength Index (RSI) sits at 47, still in negative territory but rising. Meanwhile, the MACD histogram prints green bars, hinting at potential upside correction.

Key resistance stands at 0.6250. On the downside, 0.6200 serves as key support, with a break below opening the door toward 0.6170. Until a clear breakout occurs, the pair is likely to remain in consolidation mode.

AUD/USD daily chart