The latest on AUD/USD: A comprehensive analysis for investors
AUD/USD extends decline to three-week lows near 0.6760
- The Australian Dollar (AUD) experienced a downward trend, reaching new lows despite an uncertain day for the US Dollar (USD).
- Market participants reacted to the stronger-than-expected US Non-Farm Payrolls report and ongoing geopolitical tensions, boosting demand for the Greenback.
Factors influencing AUD/USD movement
- Copper prices continued to decline, impacting the Australian Dollar’s performance.
- Iron ore prices showed signs of recovery, supported by China’s stimulus measures targeting the housing sector.
- The Reserve Bank of Australia (RBA) maintained its cash rate at 4.10% but hinted at potential rate cuts later in the year.
Market outlook and speculation
- Markets predict a 55% chance of a rate cut by the RBA before year-end.
- Speculators held net long positions for the first time since July, indicating increased optimism for AUD/USD.
- Uncertainties remain regarding China’s economic outlook and stimulus implementation.
Latest data and technical analysis
- Australia’s Inflation Gauge rose by 0.1% in September, reflecting modest growth.
- Technical analysis suggests potential further losses for AUD/USD, with key support levels at 0.6702 and 0.6687.
- Resistance levels include 0.6942 and the critical threshold of 0.7000.
AUD/USD short-term technical outlook
Extra losses might cause AUD/USD to fall to retest the intermediate 55-day and 100-day SMAs of 0.6702 and 0.6687, respectively, ahead of the September low of 0.6622 (September 11), which is still bolstered by the key 200-day SMA (0.6626).
On the plus side, the initial obstacle occurs at the 2024 top of 0.6942 (September 30), before the critical 0.7000 threshold.
The four-hour chart indicates an acceleration of the negative trend. Having said that, the initial support is 0.6756, followed by 0.6737 and finally 0.6622. On the upside, the initial hurdle is the 100-SMA at 0.6829, ahead of the 55-SMA of 0.6869 and then 0.6942. The RSI tumbled to nearly 26.