Bullish view

 Bearish view

 The AUD/USD pair continued its slow recovery as the US dollar weakness gained steam ahead of the Federal Reserve interest rate decision. It rose to a high of 0.6746, its highest level since September 6. Federal Reserve decision and US retail salesThe US will publish the August retail sales data on Tuesday as the Fed prepares to shift its tone on monetary policy.These are important numbers because they provide more information about the health of the American consumer, the most important part of the economy.Economists expect the report to show that retail sales dropped by 0.2% in August as inflation remained a concern.The report will come a week after the US released the relatively encouraging inflation data, which showed that the headline Consumer Price Index (CPI) fell to 2.5% in August, the lowest level in years.A weaker-than-expected report will likely pressure the Fed to deliver a jumbo rate cut in its Wednesday meeting. In a Bloomberg opinion, Bill Dudley, the former head of New York Fed noted that the bank should hike by 0.50%.The CME Fed Rate Monitor tool shows that the odds of a 0.50% and 0.25% rate cuts were even. Similarly, a Polymarket poll has similar estimates, with 50% of participants expecting a 0.5% cut and 49% predicting a 0.25% cut.The Fed decision on Wednesday will come ahead of the latest Australian jobs numbers scheduled on Thursday and next week’s Reserve Bank of Australia (RBA) interest rate decision.Unlike the Fed, the RBA has hinted that it may even hike interest rates since the country’s inflation has remained above 2.0% for longer. While the rate hike will not happen, there are signs that the RBA will be the last central bank to start cutting rates.In a note, Barclays analysts noted that the US dollar could stage a strong comeback ahead of the Fed decision. AUD/USD forecastThe AUD/USD exchange rate dropped to a low of 0.6623 last week and then bounced back as the US dollar sell-off continued. The 50-period and 25-period moving averages have made a bullish crossover pattern.Also, the MACD indicator has crossed the neutral level while the Stochastic Oscillator has moved above the overbought level.Most importantly, the pair is forming the handle section of the cup and handle chart pattern. Therefore, the pair will likely continue rising, with the next target to watch being at 0.6800.More By This Author:BTC/USD Forex Signal: Bitcoin Braces for More Upside Ahead Of FedBTC/USD Forex Signal: Needs to Flip 200 EMA To Avoid Death CrossBTC/USD Forex Signal: Bulls Target The 50 EMA Price At 59,800