Audusd drops by 0.75% as market eyes fomc meeting minutes

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.75%	-51.3 Pips
Week to-date	-0.77%	-52.5 Pips
October	-2.36%	-163.3 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD FOMC Meeting Minutes

What happened lately

Australia’s inflation figures, as reported by TD Securities, indicate a marginal increase in September, where the inflation rate rose to 2.6% from the previous month’s 2.5%. This slight uptick in inflation may suggest some underlying price pressures within the Australian economy, possibly influenced by rising costs or fluctuations in demand and supply dynamics. However, the increase is relatively modest, indicating a stable yet cautious economic environment concerning pricing pressures.

In contrast, the focus on the United States centers on the upcoming release of the Federal Open Market Committee (FOMC) Meeting Minutes. Scheduled for release on Wednesday at 07:00 PM, this event holds significant importance as it provides detailed insights into the Federal Reserve’s views on economic conditions and their monetary policy direction. Investors and analysts widely anticipate this event due to its potential impact on market sentiment and currency movements.

With the AUDUSD dropping by 0.75% to 0.67526 on Monday, the current situation reflects a challenging environment for the Australian dollar. The modest increase in inflation within Australia might not provide enough economic impetus to aid the AUD in gaining strength against the USD. Furthermore, the anticipation surrounding the FOMC Meeting Minutes adds additional pressure, as market participants await potential signals regarding future interest rate policies or economic outlooks that might favor the US dollar.

Thus, the slight increase in Australian inflation may not significantly boost the AUD if the FOMC minutes portray a robust or improving outlook for the US economy, potentially leading to further rate hikes or supportive monetary policy in favor of the USD. As a result, market participants may continue to exhibit caution, and traders could perceive the Australian dollar as relatively less attractive compared to the USD, given the heightened significance of the upcoming US economic data release. This scenario could lead to continued or increased volatility in the AUDUSD forex pair in the following days.

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What can we expect from AUDUSD today?

AUDUSD on Monday dropped -0.75% to 0.67526. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Monday trading session.

Looking ahead for the day, immediate support level is at S1 0.67269 with break below could see further selling pressure towards S2 at 0.67012. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.68103 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.67429 would indicate selling pressure.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -0.77%.

Key levels to watch out:

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