Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
AUDUSD Rate Outlook Mired by Lower Highs and Lows Ahead of RBA Speech

AUDUSD Rate Outlook Mired by Lower Highs and Lows Ahead of RBA Speech

David Song,
What's on this page

Australian Dollar Talking Points

AUDUSD gapped higher at the start of the week despite waning hopes of a US-China trade deal, but recent price action warns of a further decline in the exchange rate as it carves a series of lower highs and lows.

AUDUSD Rate Outlook Mired by Lower Highs and Lows Ahead of RBA Speech

AUDUSD gives back the rebound from the monthly-low (0.6688) even though the Federal Reserve delivers back-to-back rate cuts in September, and current market conditions may continue to drag on the exchange rate as the weakening outlook for global growth puts pressure on the Reserve Bank of Australia (RBA) to further insulate the Australian economy.

Image of RBA interest rates

It seems as though the RBA will retain the current policy at the next meeting on October 1 as officials from China, Australia’s largest trading partner, try to nail out a trade deal with the Trump administration, but the central bank may continue to endorse a dovish forward guidance for monetary policy as officials retain their pledge to “ease monetary policy further if needed.”

In turn, Governor Philip Lowe may prepare Australian households and businesses for lower interest rates as the central bank head is scheduled to deliver a speech later this week, and hints of a more accommodative stance may drag on AUDUSD amid the growing dissent within the Federal Open Market Committee (FOMC).

With that said, the rebound from the monthly-low (0.6688) may continue to unravel over the coming days, with the exchange rate at risk of a further decline as it carves a series of lower highs and lows.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

AUD/USD Rate Daily Chart

Image of audusd daily chart

Source: Trading View

  • Keep in mind, the AUDUSD rebound following the currency market flash-crash has been capped by the 200-Day SMA (0.7002), with the exchange rate marking another failed attempt to break/close above the moving average in July.
  • With that said, the broader outlook for AUDUSD remains tilted to the downsideas both price and the Relative Strength Index (RSI) continue to track the bearish formations from late last year.
  • More recently, the rebound from the September-low (0.6688) appears to sputtered ahead of the 0.6910 (38.2% expansion) region, with the exchange rate at risk of exhibiting a more bearish behavior as it carves a series of lower highs and lows.
  • As a result, the move below the 0.6800 (61.8% expansion) handle brings the Fibonacci overlap around 0.6720 (78.6% expansion) to 0.6730 (100% expansion) on the radar, with the break of the 2019-low (0.6677) raising the risk for a move towards 0.6620 (100% expansion).

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.