AUD: AUD/USD - Testing 0.6450 Support As USD Breaks Higher
The AUD/USD had a range overnight of 0.6451-0.6497, Asia is trading around 0.6470. Fed members strongly differed on a December cut in the minutes and the BLS said it won’t publish an October jobs report. This has seen the market pull further back on hopes of a December cut and has seen the USD break higher and Crypto have another leg lower. The AUD/USD drifted lower in sympathy and is testing its recent support around the 0.6450 area. The AUD/USD continues to chop around within its wider 0.6350-0.6650 range, the first support is right here around 0.6440-0.6460 which has been pretty solid the last couple of months, then 0.6350 below that. It would need this move lower in risk to accelerate and become something more significant to challenge down there I would think. The market waits for the Nvidia results with bated breath as risk feels like it could rollover if the market does not get the stellar results its looking for,
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD736m), 0.6530 (AUD422m), 0.6550 (AUD739m). Upcoming Close Strikes : 0.6550(AUD2.28b Nov 21) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 51 Points
- Data/Event: RBA’s Sarah Hunter speaks at the Australia Industry Group in Sydney
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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USDCAD TECHS: Bullish Trend Structure
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.4111 High Apr 10
- RES 1: 1.4080 High Oct 16 and the bull trigger
- PRICE: 1.4029 @ 17:20 BST Oct 20
- SUP 1: 1.3965/3889 20- and 50-day EMA values
- SUP 2: 1.3814 Bull channel base drawn from the Jul 23 low
- SUP 3: 1.3727 Low Aug 29 and a bear trigger
- SUP 4: 1.3689 Low Jul 28
A bull cycle in USDCAD remains intact and the pair is trading closer to its recent highs. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4111, the Apr 10 high, and further out, scope is seen for an extension towards 1.4167, a Fibonacci retracement. First key support lies at 1.3889, the 50-day EMA. Support at the 20-day EMA lies at 1.3965.
AUDUSD TECHS: Candle Pattern Highlight Potential Reversal
- RES 4: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 3: 0.6660/6707 High Sep 18 / 17 and a bull trigger
- RES 2: 0.6629 High Sep 30 & Oct 01 and key short-term resistance
- RES 1: 0.6549 50-day EMA
- PRICE: 0.6518 @ 17:19 BST Oct 20
- SUP 1: 0.6440 Low Oct 14
- SUP 2: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 3: 0.6373 Low Jun 23
- SUP 4: 0.6357 Low May 12
A recovery in AUDUSD on Oct 144 continues to highlight a possible reversal pattern - a hammer candle formation. If correct, it signals the end of the bear cycle that started Sep 17. Note that moving average studies have remained in a bull-mode position during the latest bear leg, highlighting a dominant M/T uptrend. Initial resistance is 0.6549, the 50-day EMA. A breach of 0.6440, the Oct 14 low, would cancel the reversal signal and reinstate a bear threat.
US TSYS: Treasuries Inch Higher As US Enters Shutdown Day 19
- Treasuries extended the top end of the range late Monday on relatively modest volumes (TYZ5 just over 1M) as the US Gov enters shutdown day 19, no data & the Federal Reserve in policy blackout through October 30.
- The Dec'25 10Y futures contract trades +4 at 113-19, 113-10.5 low / 113-20 high. MA studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance.
- Speaking at a bilateral meeting with Australian PM Anthony Albanese, US President Donald Trump confirms that he intends to meet Chinese President Xi Jinping in South Korea during the Asia Pacific Economic Cooperation annual summit at the end of the month.
- Expected corporate earnings announcements after the close include: Cleveland-Cliffs, Crown Holdings, Steel Dynamics, AGNC Investment Corp and Zions Bancorp - the regional bank in the spotlight last week after it "disclosed a $50 million charge-off for a loan underwritten by its wholly-owned subsidiary, California Bank & Trust," Bbg reported.
- Looking ahead, UK fiscal data will be published ahead of Canada CPI on Tuesday, while markets will remain focused on Friday’s US inflation data. An early look at analyst unrounded core CPI estimates for Friday’s delayed September release sees a median estimate of 0.30% M/M, with a reasonably wide range of 0.25-0.36% M/M.
