The AUD/USD Downtrend Continues
The AUD/USD pair resumed its weekly downtrend, breaking below the key support level of 0.6900 and hitting new multi-day lows near 0.6830. The greenback maintained its bullish performance unchanged, driving the selling bias in the Aussie Dollar.
Factors Influencing AUD/USD Movement
- The US Dollar (DXY) saw a strong recovery, supported by positive data releases and geopolitical tensions in the Middle East.
- Commodity prices, such as copper and iron ore, contributed to the downward pressure on the Aussie Dollar.
- Stimulus measures in China, especially in the housing sector, are expected to support iron ore prices in the near term.
RBA Monetary Policy and Market Expectations
The Reserve Bank of Australia (RBA) maintained its rates at 4.35% in its September meeting, with Governor Michele Bullock hinting at inflation risks but ruling out a rate hike. Markets anticipate a 55% chance of a rate cut by the end of the year, as the RBA aims to counter weak economic activity and cooling inflation pressures.
Short-Term Technical Outlook for AUD/USD
On the daily chart, AUD/USD may see further losses towards the 55-day and 100-day SMAs at 0.6699 and 0.6685, respectively, before testing the September low of 0.6622. Upside resistance lies at the 2024 peak of 0.6942 and the key level of 0.7000.
On the four-hour chart, initial support levels are at 0.6915 and 0.6829, with resistance at 0.6942 and 0.7024. The RSI indicator suggests a bearish trend with a reading near 40.
Analysis of AUD/USD Trends and Market Impact
The ongoing downtrend in AUD/USD reflects the strength of the US Dollar and the impact of geopolitical events on currency movements. Factors like commodity prices and monetary policy decisions by the RBA also play a significant role in shaping the pair’s direction.
For investors and traders, understanding these trends is crucial for making informed decisions about currency trading and portfolio management. The RBA’s cautious approach to rate changes and market expectations for future cuts highlight the importance of staying updated on economic indicators and central bank policies.
Overall, the AUD/USD movement is a reflection of global economic dynamics and market sentiment. By analyzing technical indicators and fundamental factors, investors can navigate the currency market with more confidence and strategic insight.