The drop this week is continuing after the break under the August low of 0.6347. That is leading the pair to fall to its lowest levels this year with the low today touching 0.6305. We are seeing price action keeping thereabouts now, with eyes on the October 2023 lows of 0.6270-01 next.
For today, the technical selling is persisting but we're yet to get to the main event later in the day. The FOMC meeting means that the dollar side of the equation will be the key factor influencing proceedings in the sessions ahead. That will also be a key driver in vindicating the downside break of the August low from yesterday.
If we do get a more dollar-positive reaction to the Fed, the big focus for AUD/USD is the October 2023 lows as highlighted above. If that gives way, then that will draw in the October 2022 lows near 0.6200 next.
Besides that, do be aware that the PBOC will be making their next decision on the LPRs on Friday. Market players are not expecting any changes but it's worth noting in case for any surprises after having adjusted their policy stance to being "moderately loose" now.
That might also impact the aussie side of the equation with the yuan of course having a key influence over the past two months.
This article was written by Justin Low at
www.forexlive.com.
