AUD/USD chart - Trading View
AUD/USD was extending weakness to trade 0.36% lower on the day at 0.7041 at around 03:25 GMT. Outlook for the major remains bearish.
Minutes of the Reserve Bank of Australia's (RBA) last policy meeting released earlier today provided the clearest sign yet that the central bank will likely cut rates further. The RBA is set to expand its massive bond buying campaign, to lower both borrowing costs and the local dollar.
The RBA has held its cash rate at a record low 0.25% since mid-March. Analysts now widely expect the RBA will trim the rate at its Nov.3 policy meeting to support the economy and restrain the currency. A 15 bps cut to 0.1% is now widely expected.
AUD slips lower across the board. The PBOC's status quo has had little impact so far. The People’s Bank of China (PBOC) kept the one-year Loan Prime Rate (LPR) unchanged at 3.85% in October while maintaining the five-year LPR at 4.65%.
On the data front, China's new home prices grew more slowly in September. Data released by the National Bureau of Statistics earlier today showed China September new home prices were up 0.4% m/m compared with a 0.6% increase in August. On an annual basis, home prices rose 4.6% in September, versus a 4.8% expansion in August.
Technical studies for the pair are bearish. Price action is hovering around 110-EMA support at 0.7041 as the pair extends weakness below daily cloud. Break below 110-EMA will see downside resumption. Scope for test of 23.6% Fib at 0.6963 ahead of 200-DMA at 0.6790. On the flipside, retrace above daily cloud will negate any bearish bias.
Major Support Levels:
S1: 0.7041 (110-EMA)
S2: 0.6963 (23.6% Fib)
S3: 0.6920 (55W EMA)
Major Resistance Levels:
R1: 0.7096 (20W MA)
R2: 0.7140 (55-EMA)
R3: 0.7241 (200W MA)
Summary: Price action finds strong support at 110 EMA. Break below to see further downside. Scope for test of 23.6% Fib at 0.6963 ahead of 200-DMA at 0.6790.


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