• RBA’s monetary policy meeting this week could send the Aussie to fresh lows.
  • A packed macroeconomic week in Australia has little chance of helping the pair bounce.
  • AUD/USD bearish sentiment persists, but it could recover before collapsing.

The AUD/USD pair is trading at around 0.6760 heading into the close, down for a fourth consecutive week. Never-ending trade talks between the US and China had somehow discouraged trading these days and a long holiday in the US exacerbated the quietness. An empty Australian macroeconomic calendar exacerbated the current uncertainty.

Trade talks between the US and China continued, and while both parts continue to speak encouraging words toward a deal,  speculative interest is now doubting they could clinch an agreement before year-end. In fact, things took a slight turn to the worst, as US President Trump signed the Hong Kong human rights act, supporting the protest movement, something Chinese authorities saw as a step back.  

RBA’s Governor Lowe hit the wires mid-week, indicating that negative interest rates aren't on the cards, although mentioned quantitative easing as a possibility, if the circumstances warrant it, keeping the Aussie under pressure.

 The upcoming week could be a bit more interesting in terms of macroeconomic data, as the Australian calendar will be packed, while China will also publish some relevant figures.  The RBA is scheduled to meet next Tuesday, and will likely shed some additional light on whatever is next with monetary policy. The country will also publish its Q3 Gross Domestic Product. The economy is expected to have grown by 1.7% in the three months to September, better than the previous 1.4%.

AUD/USD Technical Outlook

The AUD/USD pair is technically bearish and poised to extend its slump, as beyond technical readings saying so, the imbalances between both central banks back a downward extension in the longer run.

The weekly chart shows that the pair continues developing below bearish moving averages, although the Momentum indicator is flat around its 100 level, as the RSI heads south around 41. In the daily chart, the bearish case is also clear, given that the pair has accelerated its slump below all of its moving averages, with the 20 SMA crossing below the 100 SMA. Technical indicators remain within negative levels, although with uneven strength.

Supports for this week come at 0.6700 and 0.6670, this last a multi-year low. A clear break below it should open doors for a steeper decline toward the 0.6500 figure. The first line of sellers stands at 0.6800, then followed by 0.6840.

AUD/USD sentiment poll

The FXStreet Forecast Poll is showing a mixed sentiment, bearish for next week and by the end of the quarter, but bullish heading into the year-end. Nevertheless and in all cases, the pair is seen below the 0.6800 level on average. Should the level give up, the next long-term cap comes at around the 0.7000 figure.

The Overview chart shows that moving averages lack directional strength, turning flattered as time goes by, and with the shorter one offering a modest downward slope.

Related Forecasts:

EUR/USD Forecast: Fireworks will be back before year-end

GBP/USD Forecast: Buying big Boris lead and the Golden Cross? Corbyn can still curb gains

USD/JPY Forecast: A Santa Rally or correction time? Data battles Trump's volatile trade mood

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

EUR/USD: Bulls in control above 1.1100 starting out ECB week

Following the bounce from near 1.1100 in early Asia, EUR/USD has entered a phase of consolidated near 1.1140 region ahead of the European open. Bulls await a fresh impetus for the next push above the 1.1150 mark ahead of Eurozone/ US PMIs.

EUR/USD News

GBP/USD recedes from three-week top above 1.2400, UK Manufacturing PMI eyed

GBP/USD prints three-day winning streak amid broad US dollar weakness. Calls of further help to British employees add to the upside momentum. Downbeat Brexit headlines confront the UK’s coronavirus optimism. The UK/US PMIs will join qualitative catalysts.

GBP/USD News

Trump tenderness, China's Caixin, boost Asia

Asia is off to a rollicking start to the week with equities performing strongly and currency markets rotating out of haven US Dollars. The turbocharging of bullish sentiment this morning has multiple drivers starting with President Donald Trump. 

Read more

Gold: Teasing a rectangle breakout, $1750 in sight

Gold bulls gathering pace for the next push higher. The extension of last week’s rally in the yellow metal is mainly driven by the sell-off in the US dollar across the board, in the wake of US-China trade war relief and escalating US riots.

Gold News

WTI: Overbought RSI challenges the bulls above $35.50

WTI seesaws around 7-week-old resistance line, retreats from highest since March 11. A short-term ascending trend line on the bears’ radars during the pullback. 100-day SMA, 61.8% Fibonacci retracement together offers strong upside barrier.

Oil News

Forex Majors

Cryptocurrencies

Signatures