The Latest on AUD/USD: A Comprehensive Analysis by the World’s Top Investment Manager
AUD/USD Downtrend Continues:
- AUD/USD dropped to six-week lows near 0.6650.
- The US Dollar maintains strength with the “Trump trade” resurgence.
- Next support level for the pair is the 200-day SMA.
Following two days of gains, AUD/USD faced selling pressure on Monday, sliding near the 0.6650 level due to the robust performance of the US Dollar.
Factors Influencing the Market:
- The US Dollar’s ongoing strength since the month’s start.
- Concerns over China’s stimulus measures impacting market sentiment.
- Decline in copper prices and modest drop in iron ore prices.
The Reserve Bank of Australia (RBA) maintained its cash rate at 4.35% in September, with Governor Michele Bullock indicating no immediate rate hike despite inflation risks.
Market Expectations and RBA’s Monetary Policy:
- Market sentiment suggests a 50% chance of a rate cut by year-end.
- RBA expected to lag behind other central banks in rate cuts due to economic conditions.
- Deputy Governor Hauser’s comments on the neutral rate and inflation levels.
Speculators remain net long on the Aussie Dollar, but positions may face challenges based on developments in Chinese stimulus efforts.
Upcoming Events and Technical Outlook:
- Focus on advanced Judo Bank Manufacturing and Services PMIs in Australia next week.
- Short-term technical outlook for AUD/USD and key support/resistance levels.
AUD/USD Short-Term Technical Analysis:
If losses continue, AUD/USD could test the October low of 0.6654 and the 200-day SMA for support. Resistance levels lie at the recent high of 0.6942 and the key psychological level of 0.7000.
On the four-hour chart, initial support is at 0.6654 and 0.6622, while resistance levels are at 0.6758 and 0.6767. The RSI is at 32, indicating potential oversold conditions.
For a detailed visual analysis of AUD/USD trends, refer to the daily chart and stay updated on market movements.