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The AUD/USD pair remains supported near-term at around 0.7000, but vulnerable to a break. Economists at Westpac believe trade below 0.70 may become frequent near-term after the Reserve Bank of Australia (RBA) meeting and the US elections on Tuesday and Wednesday, respectively.

Key quotes

“For the last five weeks we have been targeting a move to 0.70, and possibly beyond, on the RBA plus US Election ‘double-header’ risks that commence on Tuesday and extend through Wednesday and beyond. Now that we are here, risk reward still favours the ‘and beyond’ part of that target. 

“Technically, the A$ remains in a clear downtrend and would need to close above 0.7080/ 0.7120 to reverse that trend.”

“So, on the RBA, we would still be looking to fade strength to 0.7050/0.7075 assuming Westpac’s call is correct that ‘the announcement of an open-ended commitment might cause market disappointment with a potential lift in market yields and the AUD’.”