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The AUD/USD pair narrowly avoided a break of 0.7000 and with the US dollar faltering, the aussie should extend its rebound towards 0.7300, according to economists at Westpac. 

Key quotes

“AUD/USD is always sensitive to the US dollar mood but the inverse correlation has tightened in recent months. This relationship is unlikely to loosen substantially in Q4. As discussed on p3, our baseline projection remains for US dollar decline into year-end. While there should be turbulence either side of the US election, we expect equities to emerge stronger, supporting AUD/USD en route to 0.75.”

“Shorter-term, we have plenty of domestic news to absorb. The RBA should hold steady but with a dovish statement. Markets will have priced in a budget pitched as growth-supportive, but it surely won’t do the Aussie’s cause any harm.” 

“If the US dollar continues to tilt lower, the 100-DMA at 0.7033 should remain well intact, with a bias for a push back to 0.7275/0.7300.”