With futures markets implying an 80% chance of a cut, and around 70% of economists also on board, then it was always going to take more than a simple cut to sink AUD today with any vengeance. Yet looking through their October statement suggests that an easing bias remains, which leaves room for another cut this year. If markets agree, we could see some bearish follow through in due course.
After an initially lacklustre reaction, AUD/USD has now sliced through key support and on track for a bearish outside day. Not helping of course is the stronger USD which has seen DXY hit its highest level since May 2017. From here, bears could target the YTD lows and intraday bears could seek short setups whilst price action remains below prior support around 0.6740. A solid upside break of the bearish channel and / or the current four-hour candle high invalidates the bearish bias.
AUD/JPY remains reluctant to break out of compression, although the current four-hour candle is the most volatile in the entire range. So the fact that’s its bearish and provided a failed break higher could appeal to bears and show there is plenty of supply around 73.30.
Whilst we may have seen the swing high in place, a more cautious approach is to wait for a clear break of support around 72.50 before assuming its next leg lower in underway. Keep an eye on indices too, as we’d want to see these falling lower to confirm a break lower on AUD/JPY.
AUD Under Pressure Ahead Of Tomorrow's RBA Meeting
It Could Be Make Or Break For The Aussie, With Several Pairs Sitting At Support
AU Unemployment Rises, RBA To Ease Again In October?
RBA Hold Rates, AUD Sticks To Its Lows Ahead Of GDP
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.