AUD/USD Choppy Session Continues – Traders Brace for the US Elections!

The AUD/USD pair closed at 0.70572,after placing a high of 0.70575, and a low of 0.69909. After posting losses for three consecutive days, the AUD/USD currency pair posted gains on Monday. The Aussie pair bounced off to 0.6989, after dropping to its lowest level in 3.5 months, amid the recovery in trading sentiment. The Reserve Bank of Australia will hold its monetary policy meeting on Tuesday, on the same day as the US Presidential elections.

The Aussie traders were prepared for both the RBA’s rate cut as well as the Quantitative Easing, amid a cautiously optimistic environment. The risk sentiment improved on Monday, as the Chinese Manufacturing PMI rose, supporting the china-proxy Aussie, and thereby ultimately boosting the AUD/USD pair.

On the data front, at 02:30 GMT, the AIG Manufacturing Index figures were released, showing an advance to 56.3 in October, against the previous 46.7. At 05:00 GMT, the MI Inflation Gauge for October came in at -0.1%, against the previous 0.1%. At 05:30 GMT, the ANZ Job Advertisements for October showed a rise to 9.4%, compared with the previous 8.3%. The Australian Building Approvals for September rose to 15.4%, from the projected 1.5%, lending support to the Aussie. At 10:30 GMT, the Commodity Prices for the year came in, showing a drop to -0.3% in October, against the previous -5.2%.

From the US side, at 19:45 GMT, the Final Manufacturing PMI figures for October remained flat, in line with the projected 53.4. At 20:00 GMT, the ISM Manufacturing PMI figures for October showed a leap to 59.3, against the expected 55.6, supporting the greenback. The Construction Spending for September fell to 0.3%, compared to the estimated 1.0%, weighing on the US dollar. Finally, the ISM Manufacturing Prices for October advanced to 65.6, against the anticipated 60.5, boosting the greenback.

Most of the economic data from the US on Monday was in favour of the US dollar, but it failed to impress the AUD/USD sellers, and the pair continued posting gains for the day. The US dollar was under pressure on Monday, ahead of the US Presidential elections on Tuesday, as the national polls are in favour of the Democratic or blue party candidate, Joe Biden rather than the Republican or red party man, Donald Trump. The depressed US dollar added further gains to the AUD/USD pair on Monday.

Another factor involved in the flailing strength of the greenback is the fact that the improved PMIs from major economies, like China and the US, faded the need for safe-havens, as they overshadowed the concerns of the spreading coronavirus. The declining US dollar helped add to the gains in the AUD/USD pair on Monday.

Daily Technical Levels
Support              Resistance
0.6992               0.7028
0.6977               0.7049
0.6956               0.7064
Pivot Point:      0.7013