AUD/USD Faces Pivotal Week with Fed Meeting and CPI Report

The Australian dollar is set for a pivotal week as key economic events unfold. The Federal Reserve meeting and Australia's quarterly CPI report are likely to drive the next major move in AUD/USD. Despite a three-week recovery, expectations for another RBA rate hike, renewed Middle East tensions, and the outlook for the US dollar could determine whether the rally extends or begins to fade.

The Federal Reserve meeting is expected to have a significant impact on the US dollar, which in turn affects the Australian dollar. Any shift in the Fed's guidance will influence market expectations and potentially drive further gains or losses in AUD/USD.

Australia's quarterly CPI report carries significant weight as it can reshape expectations for future RBA rate hikes. A strong reading could reinforce market expectations of another rate hike, while a weaker-than-expected result may lead to a reevaluation of the RBA's monetary policy stance.