Current trend

Since the beginning of the month, the AUD/USD pair has been actively declining against the background of emerging differences in the monetary rates of the US Federal Reserve and the Reserve Bank of Australia (RBA).

September data on the Australian labor market were published today, which turned out to be positive: employment increased sharply by 64.1 thousand, with a forecast of 25.2 thousand and an August value of 42.6 thousand, while unemployment remained at 4.1% instead of the expected growth to 4.2%. Thus, the labor market again demonstrated resistance to the current tight monetary policy of the RBA, which significantly reduces the likelihood of its mitigation starting this year. According to experts, the probability of starting to reduce the cost of borrowing in December of this year does not exceed 30.0%, and in 2025 it's about 75.0%.

At the same time, the US Federal Reserve is likely to continue the "dovish" course of monetary policy in the near future, despite the fact that inflation in September amounted to 2.4% with preliminary estimates of 2.3%, and employment increased by 254.0 thousand. Representatives of the American regulator note that the current level of interest rates seriously restricts economic development, and the growth rate of consumer prices is steadily moving towards the target of 2.0%. Nevertheless, although most market participants expect that by the end of the year the US Federal Reserve will make two more adjustments to the cost of borrowing (in November and December) of 25 basis points each, it is possible that the strengthening of the economy will force officials to limit themselves to only one reduction.

Thus, given the difference in the monetary campaigns of American and Australian officials, a further decline in the AUD/USD pair in the near future looks like the most likely scenario.

Support and resistance

The asset is close to the level of 0.6652, the breakdown of which will allow the quotes to develop a decline to 0.6591 (23.6% Fibonacci retracement, Murrey level [4/8]) and 0.6469 (Murrey level [2/8]). With a breakout of 0.6774 (Murrey level [7/8]), supported by the central line of Bollinger Bands, the upward dynamics may intensify to the targets of 0.6835 (Murrey level [8/8]), 0.6897 (Murrey level [ 1/8]), 0.6958 (Murrey level [ 2/8]).

Technical indicators allow for continued decline: Bollinger Bands are reversing down, MACD is increasing in the negative zone, while Stochastic is trying to reverse from the oversold zone, which does not exclude corrective growth, but its potential is seen as limited.

Resistance levels: 0.6774, 0.6835, 0.6897, 0.6958.

Support levels: 0.6652, 0.6591, 0.6469.

Trading tips

Short positions should be opened below 0.6652 with targets of 0.6591, 0.6469 and a stop-loss around 0.6700. Implementation period: 5–7 days.

Long positions can be opened above the level of 0.6774 with targets of 0.6835, 0.6897, 0.6958 and a stop-loss around 0.6730.