Search ForexCrunch

The aussie felt the heat of resurgent coronavirus cases in Europe and the US, despite Australia managed to control the latest outbreak, and is at risk of losing the 0.7000 figure and enter a selling spiral.  The Reserve Bank of Australia (RBA) will probably cut rates to a record low of 0.1% while in the US, the focus will be on the presidential election, the Federal Reserve and the Nonfarm Payrolls report, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“After over 110 days of lockdown in Victoria, the area reported no new cases for two days in a row. However, authorities are utterly cautious with scheduled reopenings. Not for nothing, the Reserve Bank of Australia anticipated more easing. The central bank will announce its decision next Tuesday and investors are already pricing in a rate cut to a record low of 0.1%.”

“The US presidential election is, for sure, the event of the week. It will take place on Tuesday, with the first results out early Wednesday. However, and given the pandemic context and the mail-in voting, the final counting may take up to two weeks to be completed. Many hope that the new US President will be announced on Friday to the latest, but there’s a good chance it could take longer. And the longer it takes, the more trouble will mean for markets, which will likely remain in risk-off mode.”

“Right after the election, the US Federal Reserve will announce its latest decision on monetary policy. The American central bank is expected to maintain the status quo. Opposite to other policymakers, US officials will likely say they are comfortable with the current levels of stimulus.”

“A busy week will end with the US October Nonfarm Payroll Report to be out on Friday. The economy is expected to have added 850K new jobs in the month, while the Unemployment rate is seen decreasing to 7.7% from 7.9%.”

“Below the 0.7000 threshold, bears will likely become more convinced and sent the pair south towards 0.6920 first, and 0.6860 later. The immediate resistance level is the 0.7100 figure, followed by 0.7170.”