AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Continuation: Below $0.6495 signals further downside.
- Key Support Zone: $0.6432 as a critical level for potential rebounds.
- Oversold RSI: May offer a short-term bounce but trend remains bearish.
The Australian Dollar (AUD/USD) has been in a steady downtrend, with the recent price hovering around $0.6475. The bearish momentum intensified after the pair broke below the key support level of $0.6548, which now acts as a resistance.
The next critical support zone lies at $0.6432, and a drop below this could open the door to further losses toward $0.6392 and potentially $0.6349. The Relative Strength Index (RSI) at 35 suggests that the pair is approaching oversold territory, which could hint at a possible rebound in the short term.
Technically, the 50-day Exponential Moving Average (EMA) at $0.6700 reinforces the bearish sentiment, as prices are significantly below this average, indicating continued downward pressure.
Traders looking for potential short positions might consider selling below $0.6495, with a target around $0.6432 and a stop-loss above $0.6548. The setup points to a high probability of bearish continuation unless the pair manages to reclaim support above the $0.6548 mark.
The AUD/USD pair remains bearish with potential for further downside if it stays below $0.6495. An oversold RSI may prompt a short-term bounce, but the overall trend favors sellers.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.64956
Take Profit – 0.64319
Stop Loss – 0.65485
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$637/ -$529
Profit & Loss Per Mini Lot = +$63/ -$52
AUD/USD Price Analysis – Nov 14, 2024
Daily Price Outlook
Despite hawkish remarks from RBA Governor Michele Bullock, the AUD/USD currency pair struggled to gain momentum, trading under pressure around the 0.6475 level and hitting an intra-day low of 0.6460.
This downward trend can be attributed to weaker-than-expected employment growth and a slight decline in the participation rate, signaling concerns about Australia's labor market and broader economic recovery.
Moreover, the US dollar’s strength, fueled by the "Trump trades" and stronger-than-anticipated October US Consumer Price Index (CPI) data, has further weighed on the AUD/USD pair.
Looking forward, traders are closely watching the US Producer Price Index (PPI) for short-term opportunities. However, the main focus will be on Fed Chair Jerome Powell’s upcoming speech, which could provide clues about the Fed’s next steps on policy.
RBA's Hawkish Stance Supports AUD, but Slower Employment Growth Puts Pressure on AUD/USD
On the AUD front, the AUD/USD pair could recover as the Reserve Bank of Australia (RBA) Governor Michele Bullock stated that current interest rates are sufficiently restrictive and will remain so until inflation trends are under control.
This suggests that the RBA is committed to maintaining its stance on inflation, which could support the AUD. She also mentioned uncertainty surrounding the actions of the US Federal Reserve and emphasized that the RBA will avoid making any hasty decisions.
Meanwhile, Australia's Prime Minister Anthony Albanese discussed trade with US President-elect Donald Trump, noting the US has a trade surplus with Australia and should "trade fairly" with its ally. He also highlighted Australia's significant investment in security.
On the data front, Australia’s unemployment rate for October was steady at 4.1%, matching expectations. The employment change in October was 15.9K, much lower than the 61.3K increase in September. The participation rate slightly dropped to 67.1% from 67.2% in September. Full-time employment rose by 9.7K, while part-time jobs increased by 6.2K.
Although employment grew, the pace was the slowest in recent months, with only a 0.1% rise compared to a 0.3% average increase over the past six months. Bjorn Jarvis, head of labour statistics, noted that unemployment is still lower than March 2020 levels, despite an increase in jobless numbers compared to last year.
Therefore, the RBA's commitment to maintaining restrictive interest rates supports the AUD, potentially providing upside for the AUD/USD pair. However, slower employment growth and a slight drop in participation may limit the AUD’s strength, keeping the pair under pressure.
US Dollar Strength Driven by Trump’s Election Win and Strong CPI Data, Weighing on AUD/USD
On the US front, the broad-based US dollar has shown strong momentum, with the US Dollar Index (DXY) hovering around 106.60, its highest level since November 2023. The recent election win of Donald Trump has raised expectations of inflationary policies, like potential tariffs, which support the US dollar.
On the data front, the October US Consumer Price Index (CPI) rose by 2.6% year-over-year, while the core CPI, excluding food and energy, increased by 3.3%, both matching forecasts. This data has kept the USD in high demand, impacting the AUD/USD pair by adding pressure on the Australian dollar.
On the monetary policy front, Fed Chair Jerome Powell said that Trump's potential return to the White House won't affect the Fed’s near-term decisions. After a recent 25-basis-point rate cut, Powell emphasized that the Fed does not speculate on future government policies.
As a result of these factors, the US dollar remains strong, keeping the AUD/USD pair under pressure, with the Greenback maintaining its upward momentum.
AUD/USD – Technical Analysis
The Australian Dollar (AUD/USD) has been in a steady downtrend, with the recent price hovering around $0.6475. The bearish momentum intensified after the pair broke below the key support level of $0.6548, which now acts as a resistance.
The next critical support zone lies at $0.6432, and a drop below this could open the door to further losses toward $0.6392 and potentially $0.6349. The Relative Strength Index (RSI) at 35 suggests that the pair is approaching oversold territory, which could hint at a possible rebound in the short term.
Technically, the 50-day Exponential Moving Average (EMA) at $0.6700 reinforces the bearish sentiment, as prices are significantly below this average, indicating continued downward pressure.
Traders looking for potential short positions might consider selling below $0.6495, with a target around $0.6432 and a stop-loss above $0.6548. The setup points to a high probability of bearish continuation unless the pair manages to reclaim support above the $0.6548 mark.
The AUD/USD pair remains bearish with potential for further downside if it stays below $0.6495. An oversold RSI may prompt a short-term bounce, but the overall trend favors sellers.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD stays bearish below the pivot at $0.65607, pressured by dollar strength.
- RSI at 30 suggests oversold conditions, but selling momentum remains high.
- Key support at $0.65369; breach could trigger a further decline toward $0.65166.
The AUD/USD pair is trading at $0.65554, down 0.28%, as it faces resistance near the pivot point of $0.65607. This level now serves as a critical marker for directional movement.
Immediate resistance sits just above at $0.65820, with additional barriers at $0.65981 and $0.66197. These levels could curtail short-term upside moves, especially as the pair remains under pressure from a strong US dollar and cautious sentiment around global growth.
On the downside, immediate support lies at $0.65369. Should the price break below this level, it may test the next support at $0.65166, with a further move toward $0.64962 if bearish momentum intensifies.
The Relative Strength Index (RSI) is currently at 30, indicating oversold conditions that could prompt a corrective bounce. However, a continued stay in the oversold region might also reflect persistent selling pressure, leaving the bearish outlook intact.
The 50-day Exponential Moving Average (EMA) is at $0.65879, slightly above the current price. This gap underscores the bearish trend, as the current price remains below both the pivot and key moving averages.
Given these signals, the short-term outlook for AUD/USD remains bearish, with potential for further declines if it stays below the $0.65607 pivot. Traders may consider entering a sell position below $0.65607, with a take-profit target of $0.65344 and a stop-loss at $0.65792 to manage risk.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65607
Take Profit – 0.65344
Stop Loss – 0.65792
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$263/ -$185
Profit & Loss Per Mini Lot = +$26/ -$18
AUD/USD Price Analysis – Nov 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair struggled to hold its ground, staying weak around the 0.6544 level and hitting an intraday low of 0.6534. However, the downward trend can be attributed to several factors including the anticipated tariff hikes on Chinese goods by US President-Elect Donald Trump pose risks to the AUD, as China is one of Australia's biggest export markets.
Meanwhile, the Westpac Consumer Confidence index in Australia rose by 5.3% to 94.6 in November, marking a two-and-a-half-year high but remaining below 100, indicating continued economic caution among consumers.
Moreover, the US Dollar gained strength as markets expect that Trump’s proposed fiscal policies may drive up investment and labor demand, potentially increasing inflation risks. This could lead the Federal Reserve to tighten its monetary policy, further supporting the US Dollar and applying additional pressure on the AUD/USD pair.
Consumer Confidence in Australia Boosted but Chinese Inflation and Limited Stimulus Weigh on AUD Outlook
On the AUD front, Australia's Westpac Consumer Confidence index rose by 5.3% to 94.6 in November, marking the highest level in two and a half years. This is the second month in a row of improvement, although the index remains below 100, meaning pessimism still outweighs optimism.
Matthew Hassan, a senior economist at Westpac, explained that families are feeling less financial pressure and are less worried about interest rate hikes, with growing confidence in the economy’s future.
Furthermore, the Australian Dollar also faced pressure from disappointing Chinese inflation data. China's Consumer Price Index (CPI) rose just 0.3% year-over-year in October, slightly below forecasts and down from September’s 0.4%, marking the lowest rate since June.
Month-over-month, the CPI fell by 0.3%, a bigger drop than expected, highlighting weaker demand. In the meantime, Bloomberg reported that Chinese regulators may soon lower taxes on home purchases, aiming to boost the real estate market.
Although, the losses in the AUD may be limited by the Reserve Bank of Australia’s hawkish tone. RBA Governor Michele Bullock recently stressed the need for tight monetary policy due to high inflation and a strong job market.
China’s latest stimulus package, a 10 trillion Yuan debt relief for local governments, was smaller than expected and lacked direct economic stimulus, further dampening optimism in Australia’s key trading partner.
Therefore, the rise in Australia's consumer confidence and the RBA's hawkish stance may provide some support for the AUD. However, weaker Chinese inflation data and limited stimulus from China could weigh on demand, likely putting downward pressure on the AUD/USD pair.
US Dollar Strengthens on Inflation Expectations and Fed's Restrictive Stance, Weighing on AUD/USD
On the US front, the US dollar is strengthening after Donald Trump’s election victory. Analysts believe that if his policies on spending, investment, and labor are put into action, they could increase inflation. This might lead the Federal Reserve (Fed) to raise interest rates, which would boost the US dollar even more.
Minneapolis Fed President Neel Kashkari said the economy is doing well but the Fed still needs to do more to bring inflation back to the 2% target. He added that the Fed needs more evidence before thinking about another rate cut.
Morgan Stanley analysts break down Trump’s potential economic plans into three areas: tariffs, immigration, and fiscal measures. They think tariffs will be a top priority, with a possible 10% tariff on all goods and a 60% tariff on Chinese goods.
While Trump’s return could lead to policy changes, Fed Chair Jerome Powell said the Fed doesn't make decisions based on possible policies. Powell emphasized that the Fed will focus on current data after cutting interest rates by 0.25%, bringing them to a range of 4.50%-4.75%.
Traders are now watching for the upcoming US Consumer Price Index (CPI) data. October’s headline CPI is expected to rise by 2.6% year-over-year, with core CPI projected at 3.3%, offering further insights into inflation trends.
Therefore, the strengthening US Dollar, driven by expectations of higher inflation and tighter Fed policies, puts pressure on the AUD/USD pair. If US inflation data aligns with forecasts, the Fed may continue its restrictive stance, further strengthening the US Dollar against the AUD.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.65554, down 0.28%, as it faces resistance near the pivot point of $0.65607. This level now serves as a critical marker for directional movement.
Immediate resistance sits just above at $0.65820, with additional barriers at $0.65981 and $0.66197. These levels could curtail short-term upside moves, especially as the pair remains under pressure from a strong US dollar and cautious sentiment around global growth.
On the downside, immediate support lies at $0.65369. Should the price break below this level, it may test the next support at $0.65166, with a further move toward $0.64962 if bearish momentum intensifies.
The Relative Strength Index (RSI) is currently at 30, indicating oversold conditions that could prompt a corrective bounce. However, a continued stay in the oversold region might also reflect persistent selling pressure, leaving the bearish outlook intact.
The 50-day Exponential Moving Average (EMA) is at $0.65879, slightly above the current price. This gap underscores the bearish trend, as the current price remains below both the pivot and key moving averages.
Given these signals, the short-term outlook for AUD/USD remains bearish, with potential for further declines if it stays below the $0.65607 pivot. Traders may consider entering a sell position below $0.65607, with a take-profit target of $0.65344 and a stop-loss at $0.65792 to manage risk.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Resistance: AUD/USD faces resistance at $0.66612; a break above may signal further upside.
- Pivot and Support Levels: $0.66395 is a key pivot; $0.65929 serves as critical support.
- RSI Reading: With an RSI of 63, momentum is moderately strong but nearing overbought levels.
AUD/USD is showing strength, trading at $0.66208, following a rebound that lifted the pair above the crucial support level of $0.66235. The immediate resistance sits at $0.66612, and if breached, it could open the door to further gains towards $0.66849.
However, the pivot point at $0.66395 remains a critical level for traders, with the 50-day Exponential Moving Average (EMA) at $0.65940, suggesting underlying support.
Technical indicators present a mixed picture; the Relative Strength Index (RSI) is currently at 63, leaning towards overbought territory but not yet signaling a full reversal. This level indicates that buyers maintain control, though caution may be warranted as momentum could slow if resistance levels hold.
For bears, a drop below the immediate support of $0.65929 could shift the bias downward, potentially driving prices towards $0.65646 and then to the next support at $0.65471.
In the short term, the Australian dollar appears poised to extend its rally, though this optimism is fragile and reliant on maintaining levels above $0.66235. A close below the 50-day EMA at $0.65940 would signal a possible shift to bearish sentiment.
Given the current dynamics, traders may look to sell below $0.66260 with targets near $0.65933 while setting a stop loss at $0.66444.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.66260
Take Profit – 0.65933
Stop Loss – 0.66444
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$327/ -$184
Profit & Loss Per Mini Lot = +$32/ -$18
AUD/USD Price Analysis – Nov 07, 2024
Daily Price Outlook
Despite a weaker-than-expected Australian Trade Balance for September, the AUD/USD currency pair continued its upward trend, staying strong around the 0.6632 level and reaching a daily high of 0.6639.
The Australian Dollar (AUD) outperformed its major peers, while the US Dollar (USD) faced a pullback after a rally sparked by Trump’s comments on Wednesday, ahead of the Federal Reserve’s (Fed) policy meeting at 19:00 GMT.
On the flip side, the US Dollar Index (DXY), which measures the USD against six major currencies, dropped from a four-month high of 105.30 to around 104.80. The Fed is widely expected to reduce interest rates by 25 basis points (bps), bringing them to a range of 4.50%-4.75%, according to the CME FedWatch tool.
AUD/USD Strengthened Amid RBA's Hawkish Stance and China Stimulus Expectations
On the AUD front, the Australian Dollar (AUD) bounced back strongly, despite a weaker-than-expected Australian Trade Balance for September. The Australian Dollar strengthened on the back of strong expectations regarding the Reserve Bank of Australia’s (RBA) hawkish stance on interest rates.
However, the RBA kept its Official Cash Rate (OCR) unchanged at 4.35% and highlighted the need for a strict policy to control inflation, driven by a strong labor market. This has given the AUD a boost.
On the data front, the Australian Trade Balance for September showed a surprising drop. The trade surplus fell to 4,609 million AUD from 5,284 million AUD in August, which was below economists' expectations of 5,300 million AUD. This was the lowest surplus since March, due to a decline in both exports and imports.
Despite this, the AUD continued to rise, supported by the possibility of China rolling out economic stimulus to boost its economy. The potential boost in Chinese investments and consumption, especially following US Republican Donald Trump’s presidential election victory, is positive for Australia as China is its main trading partner.
Therefore, the stronger Australian Dollar, driven by the RBA's hawkish stance and expectations of Chinese economic stimulus, supported the AUD/USD pair, despite a weaker-than-expected Trade Balance. This likely contributed to upward pressure on the AUD/USD pair, boosting its value.
AUD/USD – Technical Analysis
AUD/USD is showing strength, trading at $0.66208, following a rebound that lifted the pair above the crucial support level of $0.66235. The immediate resistance sits at $0.66612, and if breached, it could open the door to further gains towards $0.66849.
However, the pivot point at $0.66395 remains a critical level for traders, with the 50-day Exponential Moving Average (EMA) at $0.65940, suggesting underlying support.
Technical indicators present a mixed picture; the Relative Strength Index (RSI) is currently at 63, leaning towards overbought territory but not yet signaling a full reversal. This level indicates that buyers maintain control, though caution may be warranted as momentum could slow if resistance levels hold.
For bears, a drop below the immediate support of $0.65929 could shift the bias downward, potentially driving prices towards $0.65646 and then to the next support at $0.65471.
In the short term, the Australian dollar appears poised to extend its rally, though this optimism is fragile and reliant on maintaining levels above $0.66235. A close below the 50-day EMA at $0.65940 would signal a possible shift to bearish sentiment.
Given the current dynamics, traders may look to sell below $0.66260 with targets near $0.65933 while setting a stop loss at $0.66444.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bullish Momentum: AUD/USD holds above pivot at $0.66189, signaling potential for further upside.
- Key Support at 50 EMA: $0.65869 acts as a floor, underpinning short-term bullish bias.
- Buy Strategy: Entry above $0.66003, aiming for $0.66300 with a stop loss at $0.65842 to manage downside risks.
The Australian dollar (AUD/USD) is trading at $0.66140, up 0.46% on the day, reflecting a cautiously optimistic sentiment as it approaches a critical pivot at $0.66189. This level is shaping up as a short-term benchmark for the pair, with technical indicators leaning towards bullish potential. The Relative Strength Index (RSI) stands at 65, suggesting some upward momentum but nearing the overbought zone, signaling possible resistance ahead.
Immediate resistance is located at $0.66332, followed by further hurdles at $0.66486. A sustained break above these levels would signal a strengthening bullish trend, setting the stage for an advance. However, the 50-day Exponential Moving Average (EMA) at $0.65869 acts as a lower boundary of support, reinforcing a bullish outlook as long as prices hold above it.
On the downside, support is established at $0.65800, with additional floors at $0.65654 and $0.65464. These levels should serve as safety nets for bullish traders, as a break below $0.65800 could expose the pair to further declines. For now, the trend remains positive, with an entry strategy above $0.66003, targeting $0.66300 while managing downside risk with a stop loss at $0.65842.
The overall picture favors a short-term buying strategy given the strength of key support levels and upward momentum indicators. Traders should watch for a breakout above immediate resistance to confirm further gains.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66003
Take Profit – 0.66300
Stop Loss – 0.65842
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$297/ -$161
Profit & Loss Per Mini Lot = +$29/ -$16
AUD/USD Price Analysis – Nov 05, 2024
Daily Price Outlook
Despite the risk-off market sentiment, the AUD/USD currency pair maintained its upward momentum, trading well-bid near the 0.6623 mark and reaching an intra-day high of 0.6623. However, the latest uptick followed the release of improved Purchasing Managers Index (PMI) data on Tuesday.
Meanwhile, the Reserve Bank of Australia (RBA) opted to keep the Official Cash Rate (OCR) steady at 4.35% for the eighth consecutive time in November. The central bank is widely expected to maintain this rate in the coming months, supporting the Australian dollar.
Conversely, the US dollar weakened amid uncertainty surrounding the ongoing US presidential election. This factor further bolstered the AUD/USD pair. Moving ahead, Investors are closely watching the election outcome as former President Donald Trump and Vice President Kamala Harris expressed confidence in their campaigns, making final pushes across Pennsylvania on Monday.
Australian Dollar Strengthens Amid Positive Economic Data and US Election Uncertainty
As we mentioned, the Australian Dollar is gaining traction, thanks to better Purchasing Managers Index (PMI) data released on Tuesday. In the meantime, the Reserve Bank of Australia (RBA) has decided to keep the Official Cash Rate (OCR) steady at 4.35%, marking the eighth straight month of maintaining this rate.
However, the central bank is expected to continue this approach after their policy meeting. RBA Governor Michele Bullock highlighted the importance of keeping interest rates high for now because of ongoing inflation risks.
On the data front, Australia's Judo Bank Services PMI improved to 51.0 in October, up from 50.6 in September, indicating better performance than expected. The Composite PMI also increased to 50.2, compared to 49.8 earlier. Additionally, Australia's Producer Price Index (PPI) rose by 0.9% in the third quarter, following a 1.0% increase in the previous quarter and beating forecasts of a 0.7% rise.
This marks the 17th straight period of producer inflation, though annual PPI growth slowed to 3.9% in Q3, down from 4.8% last quarter. Meanwhile, China’s Caixin Services PMI rose to 52.0 in October from 50.3 in September.
Therefore, the AUD/USD pair is likely to strengthen as solid PMI data supports the Australian dollar, while uncertainty surrounding the US presidential election weighs on the US dollar. Investors may favor the AUD amidst stable rates and positive economic indicators.
Impact of US Election Uncertainty and Fed Rate Cut on AUD/USD Pair
On the US front, the broad-based US dollar struggled on Tuesday and turned bearish due to uncertainty surrounding the upcoming presidential election. However, the opinion polls show that Trump and Harris are almost tied, and the final results may take days to determine after the vote.
Trump has indicated that he may contest any unfavorable outcomes, similar to his actions in 2020. This election uncertainty contributed to the dollar's weakness, especially after a poll showed Kamala Harris leading Trump 47% to 44% in Iowa.
In addition to the election, investors are closely watching the US Federal Reserve's policy decision expected on Thursday, with markets anticipating a modest 25 basis point rate cut. The CME FedWatch Tool shows a 99.5% chance of this rate cut happening in November.
Meanwhile, the TD-MI Inflation Gauge rose by 0.3% month-over-month in October, up from 0.1% the previous month, marking the highest reading since July. Annually, the gauge increased to 3.0% from 2.6%. Furthermore, the US Bureau of Labor Statistics reported that October's Nonfarm Payrolls only increased by 12,000, far below expectations, while the Unemployment Rate held steady at 4.1%.
Therefore, the uncertainty from the US election and anticipated Fed rate cut may weaken the US dollar, potentially boosting the AUD/USD pair.
AUD/USD – Technical Analysis
The Australian dollar (AUD/USD) is trading at $0.66140, up 0.46% on the day, reflecting a cautiously optimistic sentiment as it approaches a critical pivot at $0.66189. This level is shaping up as a short-term benchmark for the pair, with technical indicators leaning towards bullish potential. The Relative Strength Index (RSI) stands at 65, suggesting some upward momentum but nearing the overbought zone, signaling possible resistance ahead.
Immediate resistance is located at $0.66332, followed by further hurdles at $0.66486. A sustained break above these levels would signal a strengthening bullish trend, setting the stage for an advance. However, the 50-day Exponential Moving Average (EMA) at $0.65869 acts as a lower boundary of support, reinforcing a bullish outlook as long as prices hold above it.
On the downside, support is established at $0.65800, with additional floors at $0.65654 and $0.65464. These levels should serve as safety nets for bullish traders, as a break below $0.65800 could expose the pair to further declines. For now, the trend remains positive, with an entry strategy above $0.66003, targeting $0.66300 while managing downside risk with a stop loss at $0.65842.
The overall picture favors a short-term buying strategy given the strength of key support levels and upward momentum indicators. Traders should watch for a breakout above immediate resistance to confirm further gains.
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AUD/USD Price Analysis – Oct 31, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair stopped its sluggish trend, gaining positive traction around the 0.6580 level. This bullish movement came as the US dollar turned bearish, with the US Dollar Index (DXY), which tracks the dollar's value against six major currencies, slipping slightly below 104.00.
Traders are now focused on the upcoming United States Nonfarm Payrolls (NFP) data for October, as it’s expected to shape market expectations for the Federal Reserve's interest rate decisions in the months ahead.
On the AUD side, the slower-than-expected inflation growth in Australia has dampened market expectations for a rate hike by the Reserve Bank of Australia (RBA), negatively impacting the Australian dollar (AUD) as investors seek higher-yielding currencies
Cautious US Market Sentiment and Its Impact on AUD/USD Pair
On the US side, market sentiment is cautious as investors adopt a risk-averse approach ahead of the presidential elections on November 5.
Recent national polls show a tight race between former President Donald Trump and current Vice President Kamala Harris, with many traders seemingly betting on a Trump victory.
If elected, Trump is expected to implement protectionist policies that could significantly impact the US's major trading partners.
Moreover, the US Dollar Index (DXY), which measures the dollar's strength against six major currencies, has dipped slightly below 104.00.
The upcoming Nonfarm Payrolls (NFP) report is projected to show an addition of only 115,000 jobs in October, a decrease from 254,000 in September, while the unemployment rate is expected to remain steady at 4.1%.
Investors are also keeping an eye on the US ISM Manufacturing PMI for October, which is anticipated to show a contraction but at a slower pace, moving from 47.2 in September to 47.6. These data points will likely influence market expectations for the Federal Reserve's interest rate decisions in the coming months.
Therefore, the cautious market sentiment and anticipated protectionist policies from a potential Trump presidency may weaken risk appetite, which could support the AUD/USD pair as a bearish US dollar makes Australian assets more appealing.
Meanwhile, disappointing US employment data may lead to a weaker dollar, further bolstering the AUD/USD exchange rate.
Impact of Slower Inflation on AUD/USD Pair
On the other side, inflation growth in Australia has been slower than anticipated in the third quarter, affecting market expectations for the Reserve Bank of Australia (RBA). As a result, traders now believe the RBA will maintain its Official Cash Rate (OCR) at current levels for a longer period.
Notably, the year-on-year Consumer Price Index (CPI) dropped significantly from 3.8% in the previous quarter to 2.8%, which was faster than analysts expected. In the meantime, the Annual Trimmed Mean CPI, which the RBA prefers to use as its inflation measure, increased by 3.5%, aligning with expectations.
Therefore, the slower-than-expected inflation growth in Australia may weaken the Australian dollar against the US dollar, as market expectations shift toward a prolonged period of stable interest rates from the RBA. This could create downward pressure on the AUD/USD pair.
AUD/USD – Technical Analysis
The AUD/USD pair is currently trading at $0.65676, down 0.06% on the day, as it remains under pressure below the pivot point at $0.66094.
The pair is struggling to gain traction amidst broader market sentiment favoring the U.S. dollar. With an RSI of 42, AUD/USD appears to be in a modestly bearish phase, indicating potential for further downside if selling momentum persists.
Immediate resistance for the pair stands at $0.65849, followed by more significant resistance levels at $0.66449 and $0.66873. A breakout above these levels would need strong buying interest, which is unlikely without supportive economic data or a shift in market sentiment.
On the downside, immediate support is located at $0.65420, with subsequent levels at $0.65092 and $0.64730. Notably, the 50-day Exponential Moving Average (EMA) is positioned at $0.66234, acting as a key barrier above the current price.
This EMA level reinforces the bearish outlook, as a sustained move below it could signal continued downside momentum.
For traders, a break below the entry price of $0.65857 could present a selling opportunity, targeting $0.65413 with a stop loss at $0.66106.
The current technical landscape suggests AUD/USD may continue its slide unless it manages to reclaim the $0.66094 pivot level, where a bullish reversal would become more likely. Traders should watch for any decisive moves below $0.65857, as it could validate further downside.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point Weakness: AUD/USD remains below the $0.66094 pivot, underscoring a bearish sentiment.
- Key Resistance Levels: Immediate resistance is seen at $0.65849, with stronger levels above at $0.66449.
- Support Levels: Key support zones include $0.65420 and $0.65092, with a deeper floor at $0.64730.
The AUD/USD pair is currently trading at $0.65676, down 0.06% on the day, as it remains under pressure below the pivot point at $0.66094. The pair is struggling to gain traction amidst broader market sentiment favoring the U.S. dollar. With an RSI of 42, AUD/USD appears to be in a modestly bearish phase, indicating potential for further downside if selling momentum persists.
Immediate resistance for the pair stands at $0.65849, followed by more significant resistance levels at $0.66449 and $0.66873. A breakout above these levels would need strong buying interest, which is unlikely without supportive economic data or a shift in market sentiment.
On the downside, immediate support is located at $0.65420, with subsequent levels at $0.65092 and $0.64730. Notably, the 50-day Exponential Moving Average (EMA) is positioned at $0.66234, acting as a key barrier above the current price. This EMA level reinforces the bearish outlook, as a sustained move below it could signal continued downside momentum.
For traders, a break below the entry price of $0.65857 could present a selling opportunity, targeting $0.65413 with a stop loss at $0.66106.
The current technical landscape suggests AUD/USD may continue its slide unless it manages to reclaim the $0.66094 pivot level, where a bullish reversal would become more likely. Traders should watch for any decisive moves below $0.65857, as it could validate further downside.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65857
Take Profit – 0.65413
Stop Loss – 0.66106
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$444/ -$249
Profit & Loss Per Mini Lot = +$44/ -$24