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Nov 01 - 02:36 PM
AUD/USD - COMMENT-AUD/USD Threatens Key Hurdles Ahead Of RBA
First appeared on eFXplus on Nov 01 - 12:25 PM

AUD/USD is holding above old resistance turned into support in the 0.6880/90 zone and price action suggests key hurdles will break -- but risks from the RBA have to pass first.
Today's U.S. data did little to alter market expectations for the Fed.
The probability for a December cut has been pared back but cuts in 2020 and beyond are still priced in by short term rates markets FEDWATCH.
Potential for de-escalation of U.S.-Sino trade tensions nW1N26F00M failed to boost the greenback but did rally trade-sensitive assets such as equities, EM currencies and China's yuan CNH= -- all of which the Aussie is highly correlated to.
Trade optimism also rallied Australian 10-year bond yields AU10YT=RR, which AUD/USD tracks closely, towards key 1.2% resistance.
A break would confirm a double bottom in yields and drive big gains.
The Nov. 5 RBA meeting is a risk, though, as Lowe is likely to keep the door open to rate cuts and could caution on aussie strength nS9N23B02L.
Techs suggests breaks of the trend line off December's high and the 200-DMA are coming.
October's bullish engulfing candle and rising RSIs are powerful signals. If risk sentiment remains upbeat and the RBA sounds less dovish than expected, AUD/USD bulls are likely to target July and April monthly highs.

chart: Click here

chart: Click here

Refinitiv IFR Research/Market Commentary


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