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The AUD/USD pair started the week on the back foot, ending it with modest gains around 0.7110. The upside is limited as the Reserve Bank of Australia (RBA) prepares to slash rates, Valeria Bednarik, FXStreet’s Chief Analyst, informs.

Key quotes

“The Australian dollar got hit by the RBA Minutes, as the document paved the way for a cash rate cut to a fresh record low of 0.1%. The strength of the local currency coupled with a local economic downturn after the latest Victoria’s lockdown, are among the reasons why policymakers decided to maintain a highly accommodative policy. The next RBA meeting will take place on November 3, coinciding with the US presidential election.”

“Australia will unveil Q3 inflation figures on Wednesday. As for the US, the focus will remain on stimulus, but investors will also take care of Q3 Gross Domestic Product (GDP) to be out on Thursday. The US economy is expected to have grown around 30%, a record jump.”

“The bearish case will be stronger if the pair finally breaks below the 0.7000 threshold, with the next possible bearish target at 0.6920. Below this last, the pair has room to extend its decline to 0.6840. The initial barrier to the upside is the 0.7200 level, followed by the 0.7250/70 price zone.”