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.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Australian Dollar Forecast: AUD/USD Tests Support Ahead of RBA

Australian Dollar Forecast: AUD/USD Tests Support Ahead of RBA

Rich Dvorak, Analyst

Share:

What's on this page

AUD/USD PRICE OUTLOOK: AUSTRALIAN DOLLAR PROBES KEY SUPPORT LEVEL AS RBA DECISION LOOMS

  • AUD/USD price action knocks on the door of 0.7000 once more ahead of the RBA decision
  • Australian Dollar bulls have defended this critical technical support level with fading conviction
  • The Aussie shows potential to continue carving out its bearish descending triangle pattern
Advertisement

The Australian Dollar looks teed up for another turbulent week. AUD/USD implied volatility just clocked its highest reading since mid-June, but expectations for elevated market activity comes as little surprise when considering the plethora of event risk outlined on the economic calendar. The most prominent threat faced by the Australian Dollar will likely be the upcoming RBA decision due Tuesday, 03 November at 03:30 GMT. Potential for heightened AUD/USD price volatility this week also looks exacerbated by counterpart drivers such as the US presidential election.

Introduction to Forex News Trading
Introduction to Forex News Trading
Recommended by Rich Dvorak
Introduction to Forex News Trading
Get My Guide

AUD/USD PRICE CHART: DAILY TIME FRAME (27 MAY TO 02 NOV 2020)

AUDUSD Price Chart Australian Dollar Technical Forecast

The Reserve Bank of Australia recently conveyed an increasingly dovish tilt regarding its monetary policy stance, which helped fuel Aussie selling pressure as market participants priced in expectations for a 10-basis point interest rate cut. According to overnight index swaps, the probability that the RBA cuts its policy interest rate this week currently stands at around 80%. Confirmation of this expectation could send AUD/USD price action snapping back to the 0.7000-level.

AUD/USD Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% 23% -1%
Weekly -4% 20% 1%
What does it mean for price action?
Get My Guide

That said, Australian Dollar bulls might continue to defend this critical technical support zone considering RBA dovishness appears largely priced in. The Aussie also seems to be finding buoyancy provided by its bottom Bollinger Band. Correspondingly, it seems most likely that the Aussie-Dollar will continue to carve out and oscillate within the confines of its bearish descending triangle pattern. If AUD/USD bears breach the 0.7000-price level, however, there could be potential for selling pressure to accelerate toward the 200-day simple moving average.

Keep Reading: US Dollar Forecast: Technical Levels to Watch as Election Looms

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES