- AUD/USD has fallen over 100 pips in less than 24 hours, threatening to break to fresh lows
- Neutral comments from RBA Governor Michele Bullock and tumbling US stock futures are behind the move
- RBA November rate hike odds have been slashed in halt to around 30%.
Tumbling US stock futures and neutral language from RBA Governor Michele Bullock has seen AUD/USD plunge in early Asian trade, continuing the sizeable reversal seen on Wednesday following the release of Australia’s Q3 hot inflation report. The pair is now threatening to push to fresh 2023 lows as money markets pare back expectations for a November RBA rate hike, slicing the odds from around 60% before Bullock started her appearance before parliamentarians in Canberra.
AUD/USD reversing at speed
You can see the scale of the reversal on the hourly chart below, seeing AUD/USD fall around 115 pips from the highs hit a little over 24 hours ago. A break of .6286 opens the door for a move back to 2022 low of .6170 with only minor support around .6220 evident on the charts.
While MACD suggest momentum of the reversal remains strong, RSI is oversold on the hourly, pointing to the risk of a near-term squeeze higher. .6300, .6314 and .6331 are first layers of topside resistance.
RBA, China markets like to dictate AUD/USD direction
Bullock will continue answering questions for the remainder of the morning, creating the potential for headline-driven movements. Given the AUD is acting like a barometer of sentiment towards China, the performance of the USD/CNH and Chinese stock indices may be influential later in the session.
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