November 05, 2024 at 08:52AM
The RBA held its cash rate steady in a more hawkish decision, though largely expected. AUD/USD was barely changed and only hovered within a 15 pips range after the statement and press conference. But the pair is extending higher now, up to 0.6618 from around 0.6590 earlier in the day.
There’s not much to it as market flows now are going to be tough to track in isolation. The US election is casting a large shadow over everything and that is going to be what drives the bigger market moves over the next few sessions.
So, I wouldn’t look too much in the AUD/USD rise for now. In any case, the pair still has some key technical resistance to get by on the charts. The 200-day moving average (blue line) at 0.6627 remains a key level in terms of limiting any further upside for now.
But depending on the US election results, this could be a pair that is definitely intrigue. In particular, if Harris does edge Trump to win the presidency.
A weaker dollar and lower yields would allow for traders to keep focusing on the divergent policy path between the RBA and Fed again, reigniting a potential bounce in AUD/USD. That is certainly one spot to watch considering how the RBA is standing out to the rest of its peers in the current central bank cycle.
This article was written by Justin Low at www.forexlive.com.
