AUD/USD Price Forecast: Bears await 200-day SMA breakdown amid trade jitters, RBA rate cut bets
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UPGRADE- AUD/USD remains under bearish pressure amid a combination of negative factors.
- US-China trade tensions and November RBA rate cut bets undermine the Aussie.
- Sustained USD selling bias does little to impress bulls or lend support to the major.
The AUD/USD pair attracts heavy selling for the second consecutive day on Friday and drops back closer to its lowest level since early August, around the 0.6445-0.6440 region, touched earlier this week. Renewed signs of strain in US-China trade relations, along with rising bets for more interest rate cuts by the Reserve Bank of Australia (RBA), continue to weigh on the Australian Dollar (AUD) and the currency pair.
US-China trade tensions reignited in recent weeks after US President Donald Trump threatened to raise tariffs on Chinese goods to 100% in retaliation for the latter's enhanced restrictions on the export of rare earths. US Trade Representative Jamieson Greer accused China of trying to control the world’s technology supply chains and added that China's actions will determine whether the tariffs take effect. Furthermore, US Treasury Secretary Scott Bessent warned, "if China wants to be an unreliable partner to the world, then the world will have to decouple." Adding to this, both countries announced the tit-for-tat port fees on vessels, fueling concerns about an all-out trade war between the world's two largest economies.
Meanwhile, traders ramped up bets for an RBA rate cut in November following Thursday’s disappointing release of monthly jobs data from Australia. In fact, the Australian Bureau of Statistics (ABS) reported that the Unemployment Rate shot to a near four-year high of 4.5% in September. Moreover, the number of employed people also fell short of consensus estimates and rose 14.9K from -5.4K in August. This overshadows the RBA's hawkish tilt and hopes for additional policy support from China, and fails to lend any support to the Aussie. Even the prevalent selling bias surrounding the US Dollar (USD) fails to impress bullish traders or lend support to the AUD/USD pair, which, in turn, backs the case for a further near-term depreciting move.
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, touches a one-and-a-half-week low amid bets for two more interest rate cuts by the US Federal Reserve (Fed) this year. Apart from this, economic risks stemming from a prolonged US government shutdown exert additional pressure on the Greenback. The vote on the Republican-backed stopgap funding bill to reopen the government fell short of the votes needed for passage in the Senate for the tenth time on Thursday, underscoring a deadlock in Congress. This, in turn, drags the USD lower for the fourth straight day. The AUD/USD pair, however, struggles to attract any buyers, suggesting that the path of least resistance for spot prices is to the downside.
AUD/USD daily chart
Technical Outlook
Spot prices faced rejection near the 100-day Simple Moving Average (SMA) earlier this week, and the subsequent decline favors bearish traders. Moreover, oscillators on the daily chart have been gaining negative traction and back the case for a further depreciating move. Some follow-through selling below the very important 200-day SMA, currently near the 0.6430-0.6425 area, will reaffirm the outlook and drag the AUD/USD pair below the 0.6400 mark, towards the July swing low, around the 0.6375-0.6370 region. The downward trajectory could extend further towards the 0.6350 intermediate support before spot prices eventually drop to the 0.6300 round figure.
On the flip side, any attempted recovery might now confront an immediate hurdle near the 0.6475-0.6480 region ahead of the 0.6500 psychological mark and the 0.6535 region (100-day SMA pivotal resistance). A sustained strength beyond the latter should allow the AUD/USD pair to reclaim the 0.6600 mark and climb further towards the 0.6625-0.6630 supply zone. The subsequent move up would shift the bias in favor of bullish traders and lift spot prices to the year-to-date high – levels just above the 0.6700 mark.
- AUD/USD remains under bearish pressure amid a combination of negative factors.
- US-China trade tensions and November RBA rate cut bets undermine the Aussie.
- Sustained USD selling bias does little to impress bulls or lend support to the major.
The AUD/USD pair attracts heavy selling for the second consecutive day on Friday and drops back closer to its lowest level since early August, around the 0.6445-0.6440 region, touched earlier this week. Renewed signs of strain in US-China trade relations, along with rising bets for more interest rate cuts by the Reserve Bank of Australia (RBA), continue to weigh on the Australian Dollar (AUD) and the currency pair.
US-China trade tensions reignited in recent weeks after US President Donald Trump threatened to raise tariffs on Chinese goods to 100% in retaliation for the latter's enhanced restrictions on the export of rare earths. US Trade Representative Jamieson Greer accused China of trying to control the world’s technology supply chains and added that China's actions will determine whether the tariffs take effect. Furthermore, US Treasury Secretary Scott Bessent warned, "if China wants to be an unreliable partner to the world, then the world will have to decouple." Adding to this, both countries announced the tit-for-tat port fees on vessels, fueling concerns about an all-out trade war between the world's two largest economies.
Meanwhile, traders ramped up bets for an RBA rate cut in November following Thursday’s disappointing release of monthly jobs data from Australia. In fact, the Australian Bureau of Statistics (ABS) reported that the Unemployment Rate shot to a near four-year high of 4.5% in September. Moreover, the number of employed people also fell short of consensus estimates and rose 14.9K from -5.4K in August. This overshadows the RBA's hawkish tilt and hopes for additional policy support from China, and fails to lend any support to the Aussie. Even the prevalent selling bias surrounding the US Dollar (USD) fails to impress bullish traders or lend support to the AUD/USD pair, which, in turn, backs the case for a further near-term depreciting move.
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, touches a one-and-a-half-week low amid bets for two more interest rate cuts by the US Federal Reserve (Fed) this year. Apart from this, economic risks stemming from a prolonged US government shutdown exert additional pressure on the Greenback. The vote on the Republican-backed stopgap funding bill to reopen the government fell short of the votes needed for passage in the Senate for the tenth time on Thursday, underscoring a deadlock in Congress. This, in turn, drags the USD lower for the fourth straight day. The AUD/USD pair, however, struggles to attract any buyers, suggesting that the path of least resistance for spot prices is to the downside.
AUD/USD daily chart
Technical Outlook
Spot prices faced rejection near the 100-day Simple Moving Average (SMA) earlier this week, and the subsequent decline favors bearish traders. Moreover, oscillators on the daily chart have been gaining negative traction and back the case for a further depreciating move. Some follow-through selling below the very important 200-day SMA, currently near the 0.6430-0.6425 area, will reaffirm the outlook and drag the AUD/USD pair below the 0.6400 mark, towards the July swing low, around the 0.6375-0.6370 region. The downward trajectory could extend further towards the 0.6350 intermediate support before spot prices eventually drop to the 0.6300 round figure.
On the flip side, any attempted recovery might now confront an immediate hurdle near the 0.6475-0.6480 region ahead of the 0.6500 psychological mark and the 0.6535 region (100-day SMA pivotal resistance). A sustained strength beyond the latter should allow the AUD/USD pair to reclaim the 0.6600 mark and climb further towards the 0.6625-0.6630 supply zone. The subsequent move up would shift the bias in favor of bullish traders and lift spot prices to the year-to-date high – levels just above the 0.6700 mark.
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