Current trend

The AUD/USD pair is holding around 0.6736, developing a strong “bearish” momentum formed last week when it retreated from the highs of February 2023.

The Australian dollar remains under pressure amid a strengthening US currency and a lack of strong macroeconomic publications. Thus, investors are analyzing the minutes of the Reserve Bank of Australia (RBA) meeting, at which the officials decided to keep the cost of borrowing: the key rate remained at 4.35%, and the rate on balances of funds for foreign exchange at 4.25%. According to the document, the decision is due to despite significant progress in the fight against inflation, the Q2 core consumer price index was 3.9%, above the target range of 2.0–3.0%. Officials expect the Q3 indicator to decline slightly due to federal and state aid programs. However, it may not return to the target levels before mid–2026. Thus, while the indicator remains above 3.0%, the department will not move to easing monetary policy and may even tighten it if necessary.

The American dollar is trading in an uptrend at an autumn high of 102.10 in USDX against Friday’s labor market data. The September nonfarm payrolls increased from 159.0K to 254.0K against the forecast of 140.0K, average hourly earnings accelerated from 3.9% to 4.0% YoY but slowed from 0.5% to 0.4% MoM, and the unemployment rate adjusted from 4.2% to 4.1%. In addition, the financial authorities’ rhetoric supports the currency. Yesterday, the President of the Federal Reserve Bank of St. Louis, Alberto Musalem, said he approved further interest rate cuts since the national economy is on a healthy growth trajectory. He believed that officials should be cautious in easing monetary policy since, with increased pressure, the negative consequences may exceed the progress already achieved.

Support and resistance,

On the daily chart, the trading instrument is correcting, approaching the support line of the channel with dynamic boundaries of 0.6950–0.6700.

Technical indicators are weakening the buy signal. Fast EMAs on the Alligator indicator have reversed and are approaching the signal line, narrowing the range of fluctuations, and the AO histogram is falling in the buy zone.

Resistance levels: 0.6770, 0.6910.

Support levels: 0.6700, 0.6580.

Trading tips

Short positions may be opened after the price declines and consolidates below 0.6700, with the target at 0.6580. Stop loss — 0.6750. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 0.6770, with the target at 0.6910. Stop loss — 0.6700.