AUD/USD Forecast: Aussie on the back foot after the RBA hint a rate cut

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7139

The RBA Meeting’s Minutes showed that policymakers are preparing to cut rates.
Broad US dollar’s weakness prevented AUD/USD for breaking below 0.7100.
AUD/USD neutral-to-bullish in the short term, but sentiment limits advances.

The AUD/USD pair posted a modest recovery last week, ending it in the 0.7130 price zone. The advance could be attributed to the broad US dollar’s weakness, as investors have little reasons to buy the Australian currency after the RBA Meeting’s Minutes showed that policymakers are preparing to cut rates to fresh record lows. Softer gold prices also limited the upside for Aussie.

On Friday, investors knew that the Australian preliminary October Commonwealth Bank Manufacturing PMI came in at 54.2 from 55.4 in the previous month, while the Services PMI improved to 53.8 from 50.8 in August. The country will publish the preliminary September Trade Balance, with the surplus previously at 2643 M.

AUD/USD short-term technical outlook

The daily chart shows that the AUD/USD pair has remained below its 20 DMA, which lacks directional strength, while it hovers around the 100 DMA. Both moving averages are confined to a tight range, indicating no directional convictions. Technical indicators develop below their midlines, without directional momentum. In the shorter-term, and according to the 4-hour chart, the pair is neutral-to-bullish trading above a bullish 20 SMA but below a flat 100 SMA. Technical indicators hold on to positive ground, but with uneven strength, failing to provide directional clues.

Support levels: 0.7110 0.7065 0.7020

Resistance levels: 0.7170 0.7210 0.7260

View Live Chart for the AUD/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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