Bullish View
- Buy the AUD/USD pair and set a take-profit at 0.6685.
- Add a stop-loss at 0.6545.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 0.6585 and a take-profit at 0.6500.
- Add a stop-loss at 0.6680.
The AUD/USD pair dived to its lowest level since August 16 ahead of the US election and important economic data from the country and Australia. It moved to a low of 0.6600, much lower than the year-to-date high of 0.6935.
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Key Economic Data Ahead
The AUD/USD pair continued its strong downward trend as the focus now shifts to next week’s general election in the US. Most polls show that the race is close, with Donald Trump and Kamala Harris being neck-on-neck in key swing states.
However, the prediction market is tilting toward Donald Trump, with his Polymarket odds rising to 65%. He is also leading in other prediction platforms like Kalshi and PredictIt. In most cases, the US dollar tends to strengthen ahead of a major election.
The AUD/USD pair has also retreated as investors wait for key economic data from the two countries. In the US, data by the Conference Board is expected to show that consumer confidence rose in October.
The US will also publish the latest personal consumption expenditure (PCE) data on Thursday. This is an important report because it is the Fed’s favorite inflation gauge.
The most important report will come out on Friday when the US will publish the October jobs numbers. Economists expect the data to show that the economy created over 150k jobs in October, while the unemployment rate moved to 4.0%.
The job numbers will be important because the Fed is now focusing on the labor market since inflation is moving to the 2% level. The other data to watch will be the US GDP and pending home sales numbers.
The AUD/USD currency pair will also react to the upcoming data dump from Australia, which will come out on Wednesday. Economists expect the report to show that the headline Consumer Price Index (CPI) dropped from 3.8% in Q2 to 2.3% in Q3. Still, analysts believe that the RBA will opt to hold rates steady, and possibly start to cut next year.
AUD/USD Technical Analysis
The AUD/USD pair has been in a strong bearish trend throughout this month. On the daily chart, it has moved to the 50% Fibonacci Retracement point at 0.6600. The pair has also dropped below the 50-day and 200-day Exponential Moving Averages (EMA), meaning bears are in control.
The Percentage Price Oscillator (PPO), a unique type of MACD, has also continued falling. Therefore, after testing the 50% retracement, there is a likelihood that it will bounce back and retest the 38.2% retracement level at 0.6685.
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