AUDUSD Fundamental Analysis – 7-October-2024

The AUD/USD pair hovered around $0.676 at the start of the week, following a 1.6% decline from the previous week. This drop was influenced by the strong performance of the US dollar, which recent robust economic reports from the United States have bolstered.

These reports have lessened the likelihood of significant interest rate reductions by the Federal Reserve. The 4-hour chart below demonstrates the AUD/USD price as of this writing.

US Job Market Surges

Recent data revealed on Friday indicated a substantial increase in US employment for September, surpassing many analysts’ forecasts. This robust job growth has led financial markets to adjust their expectations, nearly eliminating the possibility of a 50 basis point rate cut by the Fed in the upcoming November meeting.

Global Tensions Impact

The ongoing tensions in the Middle East have also affected the financial markets, curbing the risk appetite. This has negatively impacted currencies typically more vulnerable to global economic shifts, including the Australian dollar.

RBA’s Policy Outlook

Investors closely monitor the Reserve Bank of Australia’s (RBA) monetary policy direction. While there’s substantial anticipation that the RBA might lower rates in December—over a 70% probability assigned by markets—the consensus is that any significant policy changes could be delayed until early 2025.

This delay would likely occur if core inflation within the country remains elevated, suggesting a cautious approach from the RBA in the near term.

AUDUSD Analysis – 7-October-2024

FxNews—The Australian dollar trades bearish against the American currency, nearing minor support at $0.674. Meanwhile, the Stochastic and RSI 14 indicators record 9 and 25 in the description, respectively, meaning the market is oversold.

The market is oversold, so the AUD/USD price could experience a consolidation phase before the downtrend resumes. In this scenario, the price can potentially rise and revisit the 100-period simple moving average at $0.682 as resistance.

If the $0.682 resistance holds, the downtrend will likely be triggered again with the next target at $0.669. Please note that the bear market should be invalidated if the ADU/USD price exceeds $0.682.

Source FxNews—AUD/USD Technical Analysis.

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