Technical Analysis

AUD/USD Price Analysis – Oct 05, 2023

By LonghornFX Technical Analysis
Oct 5, 20233 min

Daily Price Outlook

The AUD/USD currency pair prolonged its upward rally and gained some further positive momentum on the day. However, this boost came after a decline in the US Dollar and a drop in US Treasury yields. Moreover, Australia's Bureau of Statistics shared some good news for the Aussie economy in August. They reported that the Trade Balance, which measures the country's exports and imports, improved significantly. This means that Australia sold more goods to other countries, and that is great for the Australian Dollar.

Moving on, there are some challenges for the AUD/USD pair. People are being careful because they're not sure what the US Federal Reserve will do with interest rates. Plus, the Reserve Bank of Australia (RBA) is also not very optimistic, and this makes the Australian Dollar weaker. So, while things are good now, there are worries for the future.

Australian Trade Improvements and RBA's Interest Rate Decision

It's important to highlight that in August, Australia sold more stuff to other countries than it bought, and this is good news for the Australian Dollar. In August, their Trade Balance improved a lot, reaching 9,640 million, which was even better than what people expected. In July, it was 8,039 million, so things got better.

However, the Reserve Bank of Australia (RBA) had a meeting recently and decided to keep the interest rate as it is, at 4.10%. But there's a chance they might raise it to 4.35% by the end of the year because prices have been going up a lot, and the RBA wants to control that. The new leader of the RBA, Michele Bullock, said they might need to make money a bit harder to get because prices are still high and might stay high for some time.

Factors Boosting the AUD/USD Pair

Another factor that has been boosting the AUD/USD pair was a dip in the US Dollar Index (DXY) from its 11-month high. This happened because some recent data about jobs in the US wasn't great, and US Treasury yields took a step back. Notably, the US economy's service sector slowed down a bit in September, and the number of new jobs created in the private sector was lower than expected. This news made the US Dollar lose some strength.

However, the major event is still to come: the Jobless Claims and Nonfarm Payrolls reports due on Friday. If those reports are good, the US Dollar could bounce back. This could also make the bond market more unpredictable.

AUD/USD Price Chart – Source: Tradingview
AUD/USD Price Chart – Source: Tradingview

In today's Daily Technical Outlook for AUD/USD on October 5, the currency pair is currently trading at $0.6363 with a 4-hour chart timeframe.

Key price levels include a pivot point at $0.6423, immediate resistance at $0.6511, and subsequent resistances at $0.6591 and $0.6682. On the support side, immediate levels are found at $0.6342, followed by $0.6253 and $0.6173.

Technical indicators show a relatively neutral stance, with the RSI at 51.87, indicating a balanced sentiment. Additionally, the 50 EMA stands at $0.6377, indicating a short-term bearish trend as the price is currently just below this level.

The observed chart pattern highlights the struggle of AUD/USD to breach the 50 EMA, implying a bearish sentiment. As for fundamental news, there are no specific updates to report.

In conclusion, the overall trend for AUD/USD appears to be bearish below the $0.6377 level, with a short-term forecast indicating a continued struggle to surpass this resistance point in the coming days, reinforcing the bearish outlook.

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