Trendline Break Signals Potential for Additional Losses

Central Bank

Economic

Summary:

If selling pressure continues to build, the next major target could be the support area around 0.6709, where the next significant local support level is located.

SELL AUDUSD

EXP

PENDING

0.70400

Entry Price

0.67100

0.72050

0.69676 -0.00176 -0.25%

Pips

PENDING

0.67100

Exit Price

0.70400

Entry Price

0.72050

The Reserve Bank of Australia (RBA) announced on Tuesday that it raised its Official Cash Rate (OCR) by 25 basis points to 4.60% from 4.35% following the conclusion of its September monetary policy meeting. The decision was fully in line with market expectations.

The move marks the RBA’s first rate increase after leaving interest rates unchanged at its previous two policy meetings.

RBA Governor Michele Bullock later explained the rationale behind the decision during the post-meeting press conference. Bullock stated that inflation remains elevated and that several of the upside risks identified in August have started to materialize. She noted that the conflict in the Middle East has intensified and that global energy prices are now considerably higher than assumed in the central bank’s previous forecasts. According to Bullock, inflation remains above desired levels, and recent developments justified additional tightening of financial conditions in order to support a return of inflation toward the target range within a reasonable timeframe.

From the United States, New York Federal Reserve President John Williams stated that he sees no immediate urgency following September’s rate increase. He added that incoming economic data will continue to guide future policy decisions and noted that if the economy evolves broadly in line with expectations, another rate increase this year remains possible. Williams also said that inflation is likely to end the year around 3.5% and gradually move toward the Federal Reserve’s 2% objective by 2028.

Meanwhile, St. Louis Federal Reserve President Alberto Musalem stated that central bankers do not need to make promises regarding future policy actions but should clearly communicate how and why monetary policy decisions are made. He emphasized that the authority delegated to the Federal Reserve over interest rates also requires transparency regarding how that authority is exercised.

Williams later reiterated during remarks at the University of Buffalo that price stability remains fundamental to the economy, while acknowledging that it remains difficult to determine exactly how restrictive current monetary policy conditions are.

Chicago Federal Reserve President Austan Goolsbee, who will hold voting rights on the Federal Open Market Committee (FOMC) in 2027, warned that remaining above the inflation target for more than five years represents a significant risk. He also highlighted that large fiscal deficits could contribute to overheating within the economy. Trendline Break Signals Potential for Additional Losses_1

Trendline Break Signals Potential for Additional Losses_1

Technical Analysis

AUDUSD recently broke below its ascending trendline, while also forming a lower high on the upper side of the structure. Together, these developments could represent the first indications that a broader bearish trend is beginning to emerge, provided the breakdown remains intact. The pair has also closed below both the 100-period and 200-period moving averages, currently located at 0.7061 and 0.7027 respectively, reinforcing the downside bias. If selling pressure continues to build, the next major target could be the support area around 0.6709, where the next significant local support level is located.

Looking at the oscillators, the RSI is currently positioned near 31, approaching oversold territory. This suggests that the most attractive opportunities to join the potential bearish trend may come from a retest of the broken trendline rather than after an extended decline. Meanwhile, the MACD continues to display a bearish histogram that is steadily gaining depth, while the signal lines have already crossed into bearish territory. As long as these conditions remain in place, the path of least resistance continues to favor further downside, leaving room for the decline to extend over the coming sessions.

Trading Recommendations

Trading direction: Sell

Entry price: 0.7040

Target price: 0.6710

Stop loss: 0.7205

Validity: Oct 12, 2026 15:00:00

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Trendline Break Signals Potential for Additional Losses

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