Current trend

Since the beginning of the month, the AUD/USD pair has been actively declining and is currently trading around three-week lows at 0.6560: the US currency is strengthening amid expectations of a slowdown in monetary policy easing by the US Federal Reserve and a possible victory for Donald Trump in the presidential election.

Recall that in September, the US regulator lowered the key rate by 50 basis points at once, but the economic data published after that showed a strengthening of the labor market and a more significant than expected increase in consumer prices, which forced officials to take a more cautious position. Most members of the US Federal Reserve board still consider the cost of borrowing to be too high and intend to continue its decline, but at a more moderate pace of 25 basis points. At the end of the week, statistics on the basic index of personal consumption expenditures for September and the labor market for October will be published. It is expected that inflationary pressure in the economy will remain stable, and employment will significantly slow down growth, which will meet the requirements of the regulator for further easing of monetary policy. If these forecasts turn out to be incorrect, then, according to experts, there is a possibility that the US Federal Reserve will refuse to adjust interest rates at the December meeting. Additional support for the US dollar is provided by the possibility of Donald Trump's return to the White House, after which the waging of "trade wars" may resume, which will suspend the process of disinflation in the economy and allow the regulator to switch back to the "hawkish" course of monetary policy.

The Australian currency is under pressure, because, unlike most of the world's leading regulators, the Reserve Bank of Australia (RBA) has not yet started cutting interest rates and is unlikely to start it this year due to persistently high inflation. According to the calculations of officials, even in 2025 it will not fall below 3.7%, which excludes a significant correction in the cost of borrowing. Thus, the regulator's policy has a negative impact on the position of the Australian dollar and pushes the AUD/USD pair to decline.

Support and resistance

Technically, the price has consolidated below 0.6591 (Murrey level [4/8], 23.6% Fibonacci retracement), which will open up the opportunity to intensify the downward dynamics towards the targets of 0.6469 (Murrey level [2/8]), 0.6408 (Murrey level [1/8]). The key for the "bulls" is the central line of Bollinger Bands around 0.6690, consolidation above which will ensure the resumption of growth to 0.6835 (Murrey level [8/8], 38.2% Fibonacci retracement) and 0.6897 (Murrey level [ 1/8]), but this scenario seems less likely.

Technical indicators confirm the continuation of the downtrend: Bollinger Bands are pointing downwards, MACD is increasing in the negative zone, and Stochastic may leave the oversold zone, which does not exclude corrective growth, but its potential is limited.

Resistance levels: 0.6690, 0.6835, 0.6897.

Support levels: 0.6469, 0.6408.

Trading tips

Short positions should be opened from 0.6555 with targets of 0.6469, 0.6408 and a stop-loss around 0.6610. Implementation period: 5–7 days.

Long positions can be opened above the 0.6690 mark with targets of 0.6835, 0.6897 and a stop-loss around 0.6650.