AUD/USD daily chart
This week's decline continues after the break below the August low of 0.6347. That makes the pair fall to its lowest levels this year with today's low touching 0.6305. We see price action continuing like that now, with eyes on the October 2023 lows of 0.6270-01 next.
For today, the technical sell-off continues but we are 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 main factor influencing transactions in the coming sessions. That will also be a key driver in consolidating the August low breakdown from yesterday.
If we get a more positive dollar response to the Fed, the big focus for AUD/USD will be the levels in October 2023 as indicated above. If that gives, that will pull in the October 2022 lows near 0.6200 next.
Additionally, be aware that the PBOC will be making their next decision on the LPRs on Friday. Market players don't expect any changes but it's worth noting in case they get any surprises after changing their policy stance to “moderately loose” now.
That could also affect the Aussie side of the equation with the yuan actually taking a big hit over the last couple of months.
