- The aussie breaks higher to reach a one-month high above 0.6300.
- The US dollar dives with all eyes on the mid-term elections.
- AUDUSD: A breach of 0.6550 might push the pair to 0.6680/6750 – SocGen.
The Australian dollar broke higher with the US dollar dropping across the board on Tuesday’s US session. The pair has broken past 0.6480 resistance area to reach levels past 0.6500 for the first time since early October.
The dollar dives with the market's focus on the US elections
A hitherto steady US dollar has lost momentum on the US morning trade, heading lower across the board with the market focusing on the US mid-term elections. Although the final results may still take days, the first polls are anticipating a Republican victory, that might bring the US congress to a gridlock.
That scenario would complicate Biden’s plan to pass the fiscal stimulus measures projected for the next year, which would provide further reasons for the Fed to ease its sharp monetary tightening cycle.
In a rather thin macroeconomic docket, Australian Business conditions deteriorated less than expected in October, although business confidence stalled, reaching its lowest level since January, according to data from the National Australian Bank.
In the US, the NFIB Business Optimism index retreated to 91.3 in October from 92.1 in the previous months. The highlights of the week in the US =calendar, however, will be October’s CPI data, which might offer further insight into December’s monetary policy decision.
AUDUSD: Above 0.6550, the pair might reach 0.6680/6750 – SocGen
From a technical perspective, FX analysts at Société Générale see the pair appreciating further if the 0.6550 resistance is broken: “The pair is evolving within an Inverted Head and Shoulders denoting potential rebound (…)Neckline at 0.6550 is the first layer of resistance. If this is overcome, a short-term up move could materialize towards the July low of 0.6680/0.6750.”
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.