Fundamental Overview

The US Dollar started the week on the backfoot as the odds of a Harris victory jumped higher leading to a pullback in the Trump’s trades.

Everything hinges on the US election now with a red sweep seen as the most bullish scenario for the greenback, while a blue sweep as the most bearish.

The price action will likely be choppy until we start to get a better sense of who’s going to win, so the best strategy would be to wait for the results, because the trend that will be set will likely last for months anyway.

On the AUD side, the RBA kept the cash rate unchanged today as expected but lowered growth and inflation forecasts slightly. This is just another subtle change towards a more dovish stance, although the market’s focus is now elsewhere.

AUDUSD Technical Analysis – Daily Timeframe

AUDUSD Technical Analysis
AUDUSD Daily

On the daily chart, we can see that AUDUSD pulled back to the key 0.6622 level amid a weaker US Dollar. This is where we can expect the sellers to step in with a defined risk above the level to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.68 handle.

AUDUSD Technical Analysis – 4 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 4 hour

On the 4 hour chart, we can see that the price broke above the downward trendline that was defining the bearish momentum on this timeframe. This might be a signal of a deeper pullback to follow. There’s not much else we can add here as the sellers will lean on the 0.6722 level to position for new lows, while the buyers will look for a break higher to target new highs.

AUDUSD Technical Analysis – 1 hour Timeframe

AUDUSD Technical Analysis
AUDUSD 1 hour

On the 1 hour chart, we can see that we now have a minor upward trendline defining the current bullish momentum on this timeframe. The buyers will likely lean on it to position for the break of the 0.6722 level, while the sellers will look for a break lower to increase the bearish bets into new lows. The red lines define the average daily range for today.

Upcoming Catalysts

Today is the US Presidential Election Day but we will also get the US ISM Services PMI report. On Thursday, we have the US Jobless Claims and the FOMC Policy Decision. On Friday, we conclude the week with the US University of Michigan Consumer Sentiment report.