Current trend

Last week, after the publication of negative macroeconomic statistics, the AUD/USD pair reached the support level of 0.6739.

Thus, the August construction permits decreased from 11.0% to 6.1% MoM, justifying experts’ forecasts and October consumer expectations for inflation over the next twelve months – from 4.4% to 4.0% compared to preliminary estimates of 4.3%. It reflects the impact of the high interest rate of the Reserve Bank of Australia (RBA). The consumer price index is 3.80%, above the regulator’s target range of 1.0–3.0%. If it continues to slow, at the meeting on November 5, department officials may move to easing monetary policy, which will affect the national currency negatively. Otherwise, the AUD/USD pair will continue to grow, as the interest rate will remain high longer than market participants expect.

The American dollar strengthens against the growth of the September consumer price index by 0.2% MoM against the forecast of 0.1%, while the core indicator increased by 0.3% against 0.2%. So, investors ruled out a 50 basis point cut in the US Fed interest rate at the meeting on November 7. Now, the probability of a –25 basis point adjustment, according to the Chicago Mercantile Exchange (CME) FedWatch Instrument, is 86.9%, and the regulator will keep a tight monetary policy longer than planned.

Support and resistance

The long-term trend remains upward. Within the correction, the price reached the support level of 0.6739, where long positions with the targets at the resistance level of 0.6825 and 0.6930 became relevant. After a breakdown of the support level of 0.6739, the quotes will be able to reach the key trend support level of 0.6635.

Last week, the medium-term trend reversed downwards. The asset broke the trend support area of ​​0.6797–0.6783 and headed towards zone 2 (0.6637–0.6621). After testing, a correction to the key resistance area of ​​0.6877–0.6861 may follow, where short positions with the targets at 0.6788 and 0.6701 are relevant.

Resistance levels: 0.6825, 0.6930, 0.7015.

Support levels: 0.6739, 0.6635, 0.6565.

Trading tips

Long positions may be opened above 0.6762, with the target at 0.6825 and stop loss 0.6732. Implementation period: 9–12 days.

Short positions may be opened below 0.6700, with the target at 0.6635 and stop loss 0.6730.