Currency analyst

AUD/USD outlook for October 3-7

What do the present AUD/USD price patterns tell us, and what next week will bring us?

The Australian dollar once again tried to challenge key resistance line at 0.77 this week, but failed to withstand its US counterpart. In the upcoming week we don’t expect any considerable moves from Aussie. We would suggest opting for the sidelines, as the news calendar doesn’t foresee any significant events that could underpin the AUD rise/downfall the next week. Perhaps, only the Reserve Bank of Australia (RBA) monetary policy meeting will increase the degree of volatility.

According to Latest Reuters poll of 57 economists, the Reserve Bank of Australia will unlikely change its interest rate at Tuesday meeting remaining concerned about low inflation and gradual AUD appreciation. But, fortunately, the strong housing market keeps Australian growth afloat. The August data form Australian Bureau of Statistics showed a significant rise in number of the building approvals, we expect the confirmation of this trend in its next release coming next week. In addition, economic growth has held up well, commodity prices experienced an upsurge. Taking into consideration all these factors, the RBA will unlikely introduce any easing measures this time.

Also, we would encourage you to keep an eye on the trade balance data coming on Thursday next week. Last release didn’t show big distortions; we hope that this time there won’t be any considerable changes as well. The smooth movement of the AUD/USD can be disturbed by the US Non-Farm Employment Change release. This data provides an early outlook of the American employment growth, which usually doesn’t deviate from the official government data. 

If there are any changes in the pair movement next week, they are expected to be insignificant. A break of the resistance line at 0.7710 will pave the way for the further northward movement up to the 0.7725 – 0.7733 zone (resistance line). Alternatively, a retreat from the level of 0.7560 will throw the doors open for the test of the next support line at 0.7475. But the technical picture doesn’t tell us that downward trend is looming – there are no clear-cut bearish trade signals. 

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