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AUD/USD loses momentum ahead of 0.77 as RBA meeting looms

  •  AUD/USD adds more than 20 pips on recent USD weakness.
  • Upbeat sentiment surrounding commodities supports the upside.
  • RBA is expected to keep the monetary policy unchanged in November meeting.

After spending the majority of the day trading sideways near mid-0.76s, the AUD/USD pair staged a modest rise in the NA session and refreshed its daily top at 0.7692. At the moment, the pair is trading at 0.7690, up 0.5% on the day.

USD fails to stretch recent rally amid a lack of fundamental catalysts

The pair's recent upsurge seems to be a product of the broad-based selling pressure witnessed on the greenback. With no fundamental drivers supporting the USD's PMI-inspired rally on Monday, the US Dollar Index is consolidating in the negative area. As of writing, the DXY was down 0.2% at 94.65. 

On the other hand, a sharp upsurge witnessed in crude oil prices amid ramped up expectations of an extension to OPEC/non-OPEC output cut agreement helps commodity-sensitive currencies such as the AUD, NZD, and CAD conserve their bullish momentum against other major currencies.

During the early trading hours of the Asian session, the Reserve Bank of Australia is going to announce its monetary policy decisions. Sharing their expectations for the meeting, "for the RBA, we look for the post-meeting statement to retain a neutral policy stance," UOB analysts note. They further add, "as described in a speech by Deputy Governor Debelle last week, the November MPS will shift away from the previous practice of displaying forecast bands (e.g. 2-3% for inflation) to point forecasts rounded to the nearest quarter-point."

  • RBA: policy to remain unchanged - UOB

Only a surprisingly hawkish tone through an optimistic economic outlook could help the aussie extend its recovery against the buck. A dovish or a neutral statement is likely to keep the pair under pressure in the coming days.

Technical outlook

The pair could encounter the immediate hurdle at 0.7700 (psychological level/200-DMA) ahead of 0.7750 (20-DMA) and 0.7830 (Oct. 23 high). On the downside, supports are located at 0.7625 (Oct. 27 low), 0.7570 (Jul. 7 low) and 0.7500 (psychological level). 

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