## AUD/USD Consolidates Near 9-Month Peak as Policy Divergence Favors Bulls

The AUD/USD pair is hovering in a tight range around 0.6640 this week, near its strongest level since mid-September, as traders navigate a critical period of central bank announcements and economic data releases. The currency pair is currently consolidating above the 0.6600 handle with upside momentum intact, though activity remains subdued as market participants await clarity on monetary policy direction.

**Policy Gap Keeps the Pair Supported**

The primary driver supporting AUD strength is the widening divergence between the RBA and the Federal Reserve. While the Fed is widely expected to cut rates by 25 basis points this week—with CME FedWatch pricing showing nearly 90% probability—the RBA is taking a different stance. The Australian central bank, led by Governor Michele Bullock, has signaled that rate hikes could be on the table for next year. This contrasting outlook is pressuring the US Dollar and providing a cushion for the Australian Dollar.

Australia's economy is performing better than expected, with the fastest annual growth in two years paired with a resilient job market. Meanwhile, the Fed has pivoted dovish, citing signs of economic cooling in recent US data. This policy gap remains the key tailwind for the AUD/USD pair, suggesting that any dips lower could attract buying interest from traders looking to establish positions near current levels around 0.6640.

**Trading Catalysts This Week**

China's Trade Balance data, due Monday, could inject short-term volatility into the currency pair. As a major trading partner, any significant shifts in China's import-export dynamics typically influence commodity currencies like the Australian Dollar.

The Fed's rate decision and Jerome Powell's commentary on Wednesday remain the week's most significant event. Traders are positioning defensively ahead of the announcement, which explains the current consolidation pattern. The AUD/USD pair is expected to test higher levels if the Fed delivers the anticipated cut without signaling aggressive future cuts, a scenario that would reinforce the rate differential advantage for Australian assets.

For traders eyeing the pair at current levels near 0.6640, breakout opportunities in either direction are likely to emerge once these events unfold. The broader technical setup remains bullish, with resistance pegged toward recent September highs.