The Lower Channel Boundary Could Provide Another Opportunity for Buyers

Central Bank

Economic

Summary:

If buyers manage to sustain this position, the bullish momentum could resume, opening the way toward 0.7187, where local resistance converges.

BUY AUDUSD

EXP

TRADING

0.70072

Entry Price

0.71850

0.68500

0.70163 +0.00115 +0.16%

0.0

Pips

Flat

0.68500

Exit Price

0.70072

Entry Price

0.71850

Democrats secured majorities in both chambers of Congress, paving the way for a divided government in Washington and increasing political and fiscal uncertainty. The Democratic faction obtained 54 seats in the Senate, 237 in the House of Representatives, and 28 governorships, consolidating its position as the main opposition to Donald Trump's policies. This shift in the political balance could create additional challenges for the administration when advancing its legislative and fiscal agenda.

Meanwhile, the ADP report showed that private employers added 86,000 jobs in October, exceeding market expectations of 69,000. However, the previous month's increase was revised downward to 86,000 from the initially reported 90,000. On the other hand, the ISM Services Purchasing Managers' Index (PMI) declined to 54.5 from 54.9, coming in slightly below expectations of 54.8, although the reading continued to indicate expansion in the services sector.

Additional US labor market data showed that job openings increased in September, according to the Job Openings and Labor Turnover Survey (JOLTS). Vacancies rose from 7.19 million to 7.5 million, representing a 4.5% increase compared with the previous month. The report also showed that the hiring rate advanced to 3.4% from 3.3%, while the total separation rate remained unchanged at 3.3%, suggesting that labor market activity continued to show some resilience.

According to the CME FedWatch tool, traders are currently pricing in an 82% probability of an interest rate increase in December, reflecting expectations that the Federal Reserve may continue its tightening cycle in response to persistent inflationary pressures.

Meanwhile, in Australia, the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points (bps) to 4.85%, as widely expected, bringing interest rates to their highest level since 2008. This marked the central bank's fifth increase this year, as policymakers respond to renewed inflationary pressures driven by the global oil crisis triggered by the war in the Middle East.

Despite the rate increase, the decision was accompanied by a divided vote and more moderate forward guidance. Six board members supported the increase, while three preferred to leave interest rates unchanged. The RBA also removed its explicit reference to further increases if necessary, suggesting that policymakers may be approaching a more cautious stage in the current tightening cycle.

RBA Governor Michele Bullock adopted a cautious tone, stating that "it is probably better to pause and assess the incoming data." Bullock also said she was "uncertain about the next move in interest rates," emphasizing that monetary policy "takes time to have an effect." Her comments indicate that the central bank may prefer to evaluate the impact of previous rate increases before making further adjustments. The Lower Channel Boundary Could Provide Another Opportunity for Buyers_1

The Lower Channel Boundary Could Provide Another Opportunity for Buyers_1

Technical Analysis

AUDUSD recently rebounded from the lower boundary of an increasingly narrow ascending channel. Following this reaction, the pair could now attempt to move toward the upper boundary, potentially extending its current recovery. Price has briefly moved back above the 100- and 200-period moving averages, located at 0.7029 and 0.6984, respectively, and has recently recovered the 200-period moving average. If buyers manage to sustain this position, the bullish momentum could resume, opening the way toward 0.7187, where local resistance converges with the upper boundary of the channel.

Looking at the oscillators, the RSI declined to 25 when price reached the lower end of the channel, clearly entering oversold territory. Since then, the indicator has gradually recovered and currently stands at 48, approaching a potential move back into bullish territory. Meanwhile, the MACD is showing a bullish histogram that has lost some depth but remains positive, while its signal lines appear close to crossing into bullish territory. A successful crossover accompanied by an increase in histogram depth would provide further confirmation of the recovery and could open the way for an extended upward move.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7005

Target price: 0.7185

Stop loss: 0.6850

Validity: Nov 17, 2026 15:00:00

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The Lower Channel Boundary Could Provide Another Opportunity for Buyers

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