AUD/USD slides towards 0.7050 amid imminent Nov RBA rate cut, USD strength

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  • AUD/USD sold-off, as Nov RBA rate cut almost a done deal.
  • US dollar buying strengthens as risk-off mood intensifies.
  • Traders eye US jobless claims, Wall Street open and stimulus news.

The selling pressure around the AUD/USD pair accelerated in the European session, knocking -off the rates to the lowest levels in two weeks near 0.7070.

The latest leg down in the spot can be mainly attributed to strengthening demand for the US dollar as a safe harbor, as the risk-off mood intensifies, reflective of the 3% sell-off in the European stocks. Fading US fiscal stimulus hopes combined with fresh restrictions imposed in Spain and France to contain the coronavirus spread spur risk-aversion.

The aussie also remains weighed down by the dovish comments from the Reserve Bank of Australia (RBA) Governor Phillip Lowe, which bolstered expectations of a rate cut as soon as in November. Additionally, an uptick in the Australian unemployment rate to 6.9% in September exacerbated the pain in the aussie, as the OZ nation’s labor market recovery slowed

The persistent factory-gate inflation in China further disappointed the AUD bulls, as attention now shifts towards the US weekly jobless claims and sentiment on Wall Street for near-term trading opportunities in the major.

AUD/USD: Technical outlook

The sell-off transpired also on the back of a technical breakdown on the four-hour chart. The price breached the critical rising trendline support at 0.7163, opening floors towards the 0.7050 levels. The Relative Strength Index (RSI) is deep into the oversold territory, suggesting that a bounce back towards the 0.7100 level cannot be ruled before it resumes its downtrend.

AUD/USD: Additional levels

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