STIR: Dovish Reaction As Powell Doesn't Meet Hawkish Expectations

• RES 4: 0.6707 High Sep 17 and a bull trigger
• RES 3: 0.6663 2.0% 10-dma Envelope
• RES 2: 0.6644 76.4% retracement of the Sep-Oct bear leg  
• RES 1: 0.6537/0.6618 50-day EMA / High Oct 29
• PRICE: 0.6520 @ 16:31 GMT Nov 10 
• SUP 1: 0.6459 Low Nov 5
• SUP 2: 0.6440 Low Oct 14 and key support 
• SUP 3: 0.6415 Low Aug 21 / 22 and a bear trigger
• SUP 4: 0.6373 Low Jun 23   

Despite Monday’s early gains, a bearish short-term tone in AUDUSD remains intact. The recent breach of the 50-day EMA undermines a recent bullish theme. This has exposed the next key support at 0.6440, the Oct 14 low. Key resistance and a short-term bull trigger is at 0.6618, the Oct 29 high. Initial resistance to monitor is at 0.6537, the 50-day EMA. A clear break of the average would strengthen a bullish case.       

The Congressional Budget Office estimates that the federal government posted a $219B deficit in October, vs just over $258B a year earlier. This would still be one of the bigger October deficit in recent years but regarding that $39B Y/Y decrease: revenues were up $75B vs a year earlier, "driven by larger collections of individual income and payroll taxes and by increased customs duties", and while outlays were up $37B that was due to a timing shift without which outlays would have decreased (not increased) by $70B vs Oct 2024.

• Overall accounting for timing changes in this first month of the fiscal year, "the decrease in the deficit for October also would have been larger— $145 billion rather than $39 billion. CBO estimates that outlays were smaller than a year ago in part because of the lapse in discretionary appropriations that began on October 1, 2025."
• As such the imminent reopening of the government will probably mean that outlays ramp up shortly to make up for lost ground.
• We should also note that CBO - whose estimates are usually quite accurate - undershot the actual September surplus by $34B, which it attributes to the lack of full data in shutdown: "Because data were not available from many agencies during the lapse in funding, CBO’s estimate of September spending did not account for certain transactions with the Treasury, a number of which were recorded as offsetting receipts."
• Treasury is due to publish its October estimates on Thursday but it's unclear whether it will produce a report even if the shutdown is resolved by then.

• RES 4: 180.37 1.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing  
• RES 3: 180.00 Psychological round number
• RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 1: 178.82 High Oct 30 and the bull trigger
• PRICE: 177.84 @ 16:23 GMT Nov 10 
• SUP 1: 175.29 50-day EMA
• SUP 2: 174.82 Low Oct 17 
• SUP 3: 173.92 Low Oct 6 and a gap high on the daily chart   
• SUP 4: 173.77 Bull channel support drawn from the Feb 28 low  

The trend in EURJPY remains bullish and a price sequence of higher highs and higher lows is intact. Moving average studies are in a bull-mode position too, highlighting a dominant uptrend. Recent gains signal scope for an extension towards 178.94 next, a 1.236 projection of the Jul 31 - Sep 29 - Oct 2 price swing. Support to watch lies at the 50-day EMA, at 175.29. A clear break of this EMA would signal scope for a deeper retracement.