AUD: AUD/USD - Turns Focus To 0.6630, Looking To Build Momentum

The AUD/USD had a range overnight of 0.6518-0.6558, Asia is trading around 0.6540. US yields ended higher and the USD continued to grind higher challenging some pivotal resistance. The AUD/USD is back within its recent 0.6400-0.6650 range with the pivot between 0.6500-0.6550 finding some demand first up, we have the RBA today but the market is not expecting them to move.

• MNI RBA Preview-November 2025: CPI Outlook Key To Rates. The Q3 trimmed mean print at 3.0% y/y up from 2.7% and at the top of the 2-3% target band was a “material miss” for the RBA and meant that the Board is now highly likely to leave rates at 3.6% at its 4 November decision. Updated staff forecasts will be released and the underlying inflation path is likely to be the focus to see how far out the return to the 2.5% band mid-point has been pushed out.
• The Board will need to see inflation resuming its trend lower towards 2.5% before it is likely to consider cutting rates again. Thus, rates are probably on hold in December and the Q4 CPI data on 28 January will be a key input into the 3 February decision.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6625(AUD 944m). Upcoming Close Strikes : 0.6500(AUD822m Nov 7), 0.6600(AUD682m Nov 7) - BBG
• Data/Event: RBA Cash Rate Target 

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• Treasuries look to finish steady (10s) to mixed, curves steeper (2s10s curve +.423 at 50.602) with the short end outperforming after the bell.
• Treasuries extended early lows after unexpectedly large corporate bond issuance announced ($40.5B with Alphabet making up $17.5B over 8 tranches) -  only to gap back to pre-open level after lower than expected ISM Mfg & Prices paid data, undershooting implications from regional Fed surveys, MNI Chicago PMI and more optimistic S&P Global PMI.
• Fed Gov Cook says in a speech Monday that she viewed the decision to cut rates in October "as appropriate, because I believe that the downside risks to employment are greater than the upside risks to inflation", while noting that this cut was "another gradual step toward normalization" keeping rates "modestly restrictive, which is appropriate given that inflation remains somewhat above our 2 percent target."
• Currently, the 10Y holds steady at 112-21.5, 10Y yield 4.1065% (+.0291). The contract has traded through the 50-day EMA, at 112-26+, highlighting potential for a deeper retracement near-term. A continuation lower would open 112-06, the Sep 25 low and the next key support. On the upside, the contract needs to trade above 113-18+, the Oct 28 high to signal a possible bullish reversal. Key resistance and the bull trigger is at 114-02, the Oct 17 high.
• The current quarter's borrowing requirements were lowered to $569B from August's $590B estimate. For the initial estimate of Jan-Mar requirements, a slight further uptick to $578B is seen. These borrowing estimates are below MNI's expectations and are at the lower end of most estimates we'd seen.
• Despite the greenback making initial further progress on Monday, the USD index rally has stalled just ahead of the psychological 100 mark, and the August highs at 100.25.

• RES 4: 0.6707 High Sep 17 and a bull trigger
• RES 3: 0.6664 2.0% 10-dma Envelope
• RES 2: 0.6644 76.4% retracement of the Sep-Oct bear leg  
• RES 1: 0.6618 High Oct 29
• PRICE: 0.6531 @ 16:29 GMT Nov 3 
• SUP 1: 0.6518 Low Nov 3
• SUP 2: 0.6493 Low Oct 24  
• SUP 3: 0.6440 Low Oct 14
• SUP 4: 0.6415 Low Aug 21 / 22 and a key support   

A bull cycle in AUDUSD remains intact and last Wednesday’s fresh high reinforces current conditions. The break higher signals scope for 0.6629, the Sep 30 and Oct 1 high. Clearance of this level would strengthen the bullish condition. Note that support at 0.6545, the 50-day EMA, has been pierced. A clear break of the EMA would undermine the current bullish phase. For now, the latest pullback appears corrective.