AUD/USD Forecast: Bears to challenge the 0.7000 threshold

AUD/USD Current Price: 0.7028

• The RBA is meeting this week and is expected to slash rates to a fresh record low.
• Australian coronavirus situation improving after almost 4-month of restrictions.
• AUD/USD is at risk of extending its decline, needs to break below 0.7000.

The AUD/USD pair finished October in the red in the 0.7020 price zone, affected by the persistent risk-off mood. Demand for the greenback dominated the scenes amid a second wave of coronavirus hitting the northern hemisphere, delaying chances of an economic comeback. The pair managed to hold above the critical 0.7000 threshold as Australia has somehow controlled the latest outbreak in the country, and is slowly moving into reopening.  However, things are doing just a bit better than in other battered economies, despite almost 4-month restrictions in the Victoria region.

The Reserve Bank of Australia is having a monetary policy meeting this week, and Governor Lowe has anticipated a possible rate cut to a record low of 0.1%. On Monday, Australia will publish the Commonwealth Bank Manufacturing PMI for October, foreseen at 54.2 and October TD Securities Inflation.

AUD/USD short-term technical outlook

The AUD/USD pair is technically bearish, although it needs to break below the 0.7000 figure to accelerate its slump. The daily chart shows that the pair is below converging 20 and 100 DMAs, while technical indicators consolidate within negative levels, favoring a bearish continuation. The 4-hour chart shows that a firmly bearish 20 SMA capped intraday advances, currently around 0.7070. Technical indicators in this last time-frame remain within negative levels with uneven strength, falling short of anticipating an upcoming advance.

Support levels: 0.6990 0.6950 0.6910

Resistance levels: 0.7070 0.7110 0.7160

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