Bearish Perspective
- Consider selling the AUD/USD pair with a target profit at 0.6400.
- Implement a stop loss at 0.6600.
- Timeframe: 1-2 days.
Bulllish Perspective
- Consider buying the AUD/USD pair with a target profit at 0.6600.
- Implement a stop loss at 0.6400.
The AUD/USD exchange rate is trading within a tight range at a significant support level after the Reserve Bank of Australia (RBA) decided to keep interest rates steady. Currently, it’s at 0.6500, which is a drop from the year-to-date high of 0.6700.
Last week, the AUD/USD reacted to the RBA’s decision to maintain the policy rate at 3.6%. There are concerns regarding the inflation rate, which remains higher than the 2% target.
Recent statistics indicate that Australia’s main consumer inflation rate has increased in the third quarter. Hence, any potential interest rate cuts could amplify inflation in the near future.
The upcoming jobs report this Thursday could be a significant factor for the AUD/USD pair. Economists are predicting an addition of 14,500 jobs in October, down slightly from the 14,900 jobs added the month before. The unemployment rate might tick up from 4.5% to 4.6%.
Although the labor market feels crucial, the RBA’s current focus on inflation is likely to overshadow its overall impact.
Another potential influence for both bullish and bearish scenarios could stem from developments around the ongoing government shutdown. There are indications that it might soon conclude, which could provide some economic relief and possibly lead to the release of important macroeconomic data.
Additionally, insights from prominent Federal Reserve officials like John Williams from New York and Anna Paulson from Philadelphia may also provide guidance on future expectations. Other officials, including Rafael Bostic and Stephen Moran, are likely to offer additional commentary.
AUD/USD Technical Analysis
Looking at the daily chart, the AUD/USD pair has been quite unstable over the last few months. It has slipped from its peak of 0.6700 to its current level of 0.6495.
The pair has traded below the 50-day exponential moving average (EMA) and is also underneath the supertrend indicator, which suggests that bearish sentiment is dominating.
Additionally, the pair is forming a head and shoulders pattern right at the neckline, while the True Strength Index (TSI) has dipped below the zero line.
This indicates that the AUD/USD might experience a significant bearish breakout, potentially reaching the psychological level of 0.6400. A rise above the 0.6536 resistance level would negate this bearish outlook.
