• AUD/USD plummeted to three-month lows near 0.6500.
  • The US Dollar rebounded sharply after Trump secured a second term.
  • Next on tap will be the Fed’s interest rate decision on Thursday.

The US Dollar (USD) came roaring in the wake of the US election and rose to fresh tops on Wednesday, sentencing the Australian Dollar and the rest of the risk-linked galaxy to retreat sharply.

Against that backdrop, AUD/USD rapidly faded two consecutive daily advances in a row and collapsed to the vicinity of the 0.6500 neighbourhood for the first time since early August. Following this steep knee-jerk, spot broke below the key 200-day SMA (0.6627), at the same time shifting its near-term outlook to bearish and hence allowing for extra weakness in the short-term horizon.

Also weighing on the Aussie Dollar, China’s recent stimulus measures remain a question mark, with steady iron ore prices somewhat limiting the downside vs. a marked retracement in copper prices.

In monetary policy, the Reserve Bank of Australia (RBA) held interest rates steady at 4.35%, as expected, while maintaining a neutral stance on Tuesday. The RBA emphasised it remains vigilant on inflation risks, with inflation gradually nearing its target range. Forecasts suggest inflation will meet the midpoint of the 2-3% target by late 2026, though growth projections were slightly downgraded.

At her subsequent press conference, RBA Governor Michelle Bullock balanced her remarks, mentioning that the board hadn’t discussed immediate rate changes, suggesting current settings are appropriate. Market expectations indicate a possible rate cut in May 2025, with the RBA likely to be one of the last G10 central banks to ease policy.

Meanwhile, Australia’s September CPI slowed to 2.1%, while Q3 annual inflation came in at 2.8%, with the trimmed mean CPI at 3.5% YoY. Looking ahead, potential rate cuts from the Federal Reserve may support AUD/USD, though concerns about China’s economic outlook could limit its upward momentum.

AUD/USD daily chart

AUD/USD short-term technical outlook

Extra losses might send the AUD/USD to its November low of 0.6511 (November 6), ahead of the 2024 bottom of 0.6347 (August 5).

On the upside, the initial obstacle is the so-far November high of 0.6641 (November 5), followed by the interim 100-day and 55-day SMAs of 0.6690 and 0.6728, respectively, before the 2024 peak of 0.6942 (September 30).

The four-hour chart shows a sudden resumption of the bearish bias. That being said, the initial resistance level is 0.6641, followed by 0.6661, and then 0.6723. Meanwhile, the initial support is around 0.6511, prior to 0.6347. The RSI receded to around 46.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD could revisit recent lows on a hawkish Fed

EUR/USD could revisit recent lows on a hawkish Fed

EUR/USD is expected to remain under heavy pressure as investors continue to digest the Trump’s victory, while a hawkish message from the Fed at its meeting on Thursday could well motivate spot to retest recent lows near 1.0680.

EUR/USD News
USD/JPY: Prospects for extra gains remain on the table

USD/JPY: Prospects for extra gains remain on the table

USD/JPY cleared the 154.00 barrier in a convincing fashion, leaving behind the key 200-day SMA (151.60) and opening the door to potential extra gains in the short-term horizon.

USD/JPY News
Gold pares losses, consolidates around $2,660

Gold pares losses, consolidates around $2,660

Gold remains under heavy bearish pressure and trades at a fresh multi-week low below $2,700 as markets react to Donald Trump's victory in the presidential election. The benchmark 10-year US Treasury bond yield rises more than 4% on the day, forcing XAU/USD to stretch lower.

Gold News
Coinbase’s Paul Grewal urges SEC to embrace change on crypto after Trump's victory

Coinbase’s Paul Grewal urges SEC to embrace change on crypto after Trump's victory

Paul Grewal, Coinbase's Chief Legal Officer, has asked the US Securities & Exchange Commission (SEC) to reconsider how it regulates cryptocurrencies now that Donald Trump has been elected to a second term as president.

Read more
Trump wins: Tax cuts come with a cost

Trump wins: Tax cuts come with a cost

Donald Trump’s victory will ensure a lower tax environment that should boost sentiment and spending in the near term. However, promised tariffs, immigration controls and higher borrowing costs will increasingly become headwinds through his presidential term.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Majors

Cryptocurrencies

Signatures