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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
U.S. Total Vehicle sales at 12:00 am GMT (Nov.3)
Reserve Bank of Australia Interest Rate Decision at 3:30 am GMT (Nov.3)
What to Watch: AUD/USD
On the one-hour chart above of AUD/USD, we can see the pair recently took a tumble, rolling lower with broad risk sentiment as traders shifted to a negative stance on growing pandemic fears last week.
The pair seems to be ranging between the major psychological level of 0.7000 and 0.7060 at the moment, but that could change quickly with the latest monetary policy decision from the Reserve Bank of Australia coming soon.
Expectations are for the RBA to cut the cash rate to 0.10% and give a dovish tone on their economic outlook. This may be baked into the Aussie already, but if this scenario does play out and the Aussie spikes higher, AUD/USD bears may want to watch the 0.7060 -0.7100 area for bearish reversal patterns. This is not only the top of the recent range but also the Fibonacci retracement area of the recent swing move lower.
If the RBA surprises with a scenario involving no rate cut and/or an optimistic outlook on the economy, then the Aussie could spike higher.
Look for a break above the current range for a potential long opportunity, and a possible break-and-retest setup around the 0.7060 area as a potential entry signal.
Another bullish setup to considering in the scenario is a retest and bullish reversal patterns at the major psychological area of 0.7000. And this is a great setup to consider if broad risk sentiment continues to lean positively.