AUD/USD Forecast: Bearish pressure mounts after Lowe hints a rate cut

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7080

RBA’s Governor Philip Lowe hinted a possible rate cut in the near-term to support jobs growth.
The focus shifts to Chinese Industrial Production and Retail Sales, seen up in September.
AUD/USD is bearish and could break below the 0.7000 threshold.

The AUD/USD pair consolidated its weekly losses on Friday, finishing the day at 0.7080, its lowest daily settlement for this October. The Australian dollar was quite resilient to demand for the greenback but took a hit from Reserve Bank of Australia’s Governor Philip Lowe, who hinted a possible rate cut in the near-term, meant to support jobs growth and alleviate currency pressures within the current pandemic context. A better market mood ahead of the weekly close limited the bearish potential of the pair.

Australia won’t publish relevant data this Monday, with the focus on Chinese macroeconomic figures. The country will publish September Industrial Production, foreseen at 5.8% YoY and Retail Sales for the same month, seen improving from 0.5% to 1.8% YoY.

AUD/USD short-term technical outlook

The AUD/USD pair daily chart offers a neutral-to-bearish stance, as the pair is trading around a bullish 100 DMA but below a bearish 20 DMA. The Momentum remains neutral, heading south around its midline, while the RSI is currently at 40, skewing the risk to the downside. In the shorter-term, and according to the 4-hour chart, the pair is firmly bearish, as it settled far above all of its moving averages, with the 20 SMA extending its decline below the larger ones. Technical indicators, in the meantime, have turned south within negative levels, reflecting the strong selling interest around the pair.

Support levels: 0.7050 0.7020 0.6980

Resistance levels: 0.7130 0.7170 0.7205

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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