Current trend

The AUD/USD pair is actively declining, holding in the area of 0.6544 and returning to the levels of the middle of last week. The instrument is under pressure from preliminary results of the US presidential elections, which are coming in during the morning hours of today's trading session.

Republican candidate Donald Trump's early lead is bolstering investor confidence that the US Federal Reserve will move toward tighter monetary policy. In particular, Trump is expected to increase tariffs (primarily with respect to products from China), which will require a stronger position for the American currency: for goods from allied countries, they could amount to 10.0–20.0%, and for direct competitors of the United States, such as China, they could reach 60.0–100.0%. At the same time, at the next meeting of the American regulator, which will take place tomorrow, the interest rate will most likely be adjusted by –25 basis points to 4.75%. Analysts also expect another decrease in the indicator by a similar amount in December.

Meanwhile, the Reserve Bank of Australia (RBA) meeting ended on Tuesday: as expected, officials kept the interest rate at a 12-year high of 4.35%, citing an unstable balance of supply and demand. At the same time, the RBA’s forecasts are quite optimistic, and it soon expects to return to reducing borrowing costs. The regulator's latest forecasts indicate that core inflation will only fall to 3.4% by the end of the year and will not reach the target range until 2026, so experts remain confident that the "dovish" cycle will only begin in the spring of next year. The RBA is also in no hurry to get ahead of the US Federal Reserve in cutting interest rates, given the possible victory of the Republican Party in the US elections.

Statistics from Australia published the day before provided moderate support for the instrument: the Commonwealth Bank's Services PMI in October showed a moderate increase from 50.6 points to 51.0 points with neutral forecasts. Today, the market is focused on business activity data from the Australian Industry Group (AiG): the Manufacturing PMI rose from –33.6 points to –19.7 points, the Construction PMI fell from –19.8 points to –40.9 points, and the Industry Index fell from –18.6 points to –28.8 points.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting ambiguous nature of trading in the short/ultra-short term. MACD is trying to reverse downwards keeping a previous weak buy signal (located above the signal line). Stochastic, failing to reach the level of "80", reverses into a downward plane, reacting to the surge in "bearish" sentiment.

Resistance levels: 0.6600, 0.6622, 0.6644, 0.6675.

Support levels: 0.6536, 0.6500, 0.6456, 0.6420.

Trading tips

Short positions may be opened after a breakdown of 0.6500 with the target at 0.6420. Stop-loss — 0.6536. Implementation time: 2-3 days.

The return of the "bullish" trend with the breakout of 0.6600 may become a signal for new purchases with the target of 0.6700. Stop-loss — 0.6550.