Against the background of the correction of the USD, the AUD/USD pair was able to reach the resistance level of 0.6390.
Last Friday, it was possible to observe the closing of large long positions on the USD, which confirms the movement of the USD Index to a maximum at 113.810. The peak of the second week of October was recorded at the same level. The liquidation of transactions is due to the upcoming meeting of the US Fed scheduled for November 2, where the probability of an interest rate increase by 75 basis points by the US financial authorities is already estimated at 94%. In this regard, market participants want to get more favorable prices for buying in the AUD/USD pair. It can be assumed that before the meeting, the dollar exchange rate will continue to correct downwards and, if the forecast is justified, then we should expect an upward momentum of quotations.
In turn, the deputy head of the Reserve Bank of Australia (RBA) Christopher Kent said in his speech today that the board of the regulator plans to further increase the interest rate, but the size and timing of its adjustment will depend on incoming economic data. The uncertainty of the RBA acts as a catalyst for the decline of the AUD/USD pair from the resistance level of 0.6390 to the October low of 0.6190, and the continuation of the "hawkish" policy of the US Fed will only push the instrument to a more rapid downward trend.
The long-term trend is downward. Today, the trading participants tested a strong resistance level of 0.6390, and now the AUD/USD pair is declining with a likely target at 0.6190, in case of a breakdown of which the "bears" will continue to move to the area of 0.5990.
The mid-term trend is downward. After the key resistance test in the area of 0.6367–0.6350, the AUD/USD pair is declining with a target in the area of the target zone 5 (0.6136–0.6116). A strong support level is at 0.6230, and if it is held, there will be a chance of a trend change to an upward one.
Resistance levels: 0.6390, 0.6525, 0.6700. | Support levels: 0.6190, 0.5990.