AUD/USD's rally from the 2019 low is in jeopardy after falling to a 12-day trough, with concerns growing among longs as the 21-DMA caps gains.
The latest RBA minutes raised concerns that tax cuts along with two rate cuts have not had the desired effect of stimulating the economy.
The August Australian jobs report showed a rising unemployment rate while full-time employment dropped significantly.
Those factors have led bank analysts in Australia to move up expectations for rate cuts.
After the minutes CBA moved their call for a cut up to October from November.
Overnight, NAB and Citi altered their calls for cuts by moving them from November to October as well nL3N26B05P.
Australian rates markets highlight the increased chance of a cut, with the probability now standing near 80% RBAWATCH.
The altered expectations drove AUD/USD below the 50% Fib of 0.6678-0.6895 and allowed a long upper wick to form on the monthly candle -- both of which give technicals a bearish tint.
Bears may proceed cautiously, though, as U.S.-Sino trade talks begin next week . If talks progress positively risk will rally and AUD/USD should follow.
If trade tensions intensify, safe-haven flows should ensue, which would drive down EM currencies, China's yuan and the aussie.
For now AUD/USD seems set to test 2019's low on RBA expectations.
chart: Click here