AUDUSD Trade Idea

Form a main idea and anticipate what may change to reverse the idea

The main idea here is for the current trend in USD index to continue. As China is out for national  day Golden week, expect USDCNH to be range bound. Moves in AUDUSD are likely to be the result of the broad USD move or large surprises in Services and Composite PMI data and AUD trade data. 

RBA Rate decision - Michelle Bullock's first policy statement was largely unchanged from the Sep meeting. RBA kept the interest rate unchanged at 4.10% as uncertainties regarding the lag effects of monetary policy and uncertain economic outlook continue to weigh on decision making. Inflation continues to be elevated with price pressures on goods inflation easing while prices of some services and oil continuing to rise. RBA expects inflation to decline to within the 2-3% range in late 2025 and U/R to gradually rise to 4.50% late next year. 

AUDUSD broke the recent 46 day, 32 trading day 0.6360 - 0.6500 consolidation range in the direction of the trend. Typically, consolidation breaks of such long time horizon, continue in the direction of the breakout. 

We could see support come in at the 0.6260 and 0.6190 levels.

Consolidation breaks can be played 2 ways:

1. Wait for a rally to 0.6360 to short the pair with stop above 0.6400

2. Short the pair here at 0.6327 to play the momentum but ideal stop loss is still seen above 0.6400 or it's like throwing darts and hoping it may strike and you make money. 

So the trade for me here is to sell into rallies around the 0.6360 support turned resistance zone with stops at 0.6410.