AUD/USD stuck in range in high 0.71 area, 0.7130s support is key into RBA

• US dollar pressured some more at the start of the week, eyes on Trump’s health, RBA.
• US elections and stimulus speculations are also a driver for risk appetite. 
• AUD/USD is correlated to performance on Wall Street

AUD/USD has been back mirroring the price action in the S&P 500 in recent sessions, both of which are pressuring a critical resistance.

For AUD, the 0.72 area is holding off the bulls for the time being while a number of crucial factors continue to swirl around the pair like vultures to a vulnerable animal. 

First and foremost, there is a growing sense of urgency with respect to the US stimulus in the markets and risk appetite depends on it as we count down to the US Election Day on the 3rd of November.

To throw a spanner in the works, the US president, Donald Trump, contracted COVID-19 but there has been an air of optimism surrounding the US president’s potential release, which has just been confirmed:

However, there has been no immediate reaction on the stock market, which means it is safe to say that he was either expected to recover or stimulus matters most. 

• The S&P 500 Weekly Forecast: Bulls may struggle below 3,400s, eyes on the rising bearish wedge

Rekindled hopes of US stimulus have already pushed up stocks around the globe at the start of the week, so now it is more about there being proof in the pudding.

House Speaker Nancy Pelosi said on Sunday progress is being made on the government’s next coronavirus relief package:

“We’re making progress.”

Donald Trump also tweeted about a sense of urgency for stimulus:

”OUR GREAT USA WANTS & NEEDS STIMULUS,” he said in the tweet. “WORK TOGETHER AND GET IT DONE. Thank you!”

Meanwhile, markets await the outcome of the Reserve bank of Australia this week.

”The market consensus may be expecting steady rates from the RBA at tomorrow’s meeting but there is a strong chance that door will be left ajar for a reduction in the cash rate to 0.1% potentially as soon at the November meeting,” analysts at Rabobank explained.

”AUD/USD could find support from a few more fiscal spending surprises,” the analysts added.

”However, faced with the possibility of a decent safe-haven demand for the USD in Q4 and the likelihood of further RBA policy easing, we expect AUD/USD to be trading modest lower at 0.71 on a 1-month view.”

AUD/USD technical analysis

• AUD/USD Price Analysis: Price being monitored for a break of support structure

There is nothing to be done with the price, from a swing trading perspective, while it is consolidated between a range in the 0.71 area:

However, a break of either 0.7200 or 0.7130 to the downside would be compelling.