FX.co ★ Blackpink | AUD/USD

AUD/USD draws buyers for a second straight day on Thursday amid a Democratic sweep in the US midterm elections and falling US bond yields, sending the US Dollar (USD) to a new low since late September. Prices remain above the key 0.7000 level in the Asian session. Still, the absence of a follow-through calls for caution ahead of any position-taking on further continuation of yesterday's strong rebound from the area around mid-0.6900s, or a two-and-a-half-week low. The Reserve Bank of Australia (RBA) made a dovish rate hike on Tuesday, marking a change of course towards a more cautious, wait-and-see approach. The central bank noted rising unemployment risks and, for the first time since June, stopped using language about the possibility of further hikes in its statement, reducing the likelihood of a December hike. This, in turn, weighs on the Australian Dollar (AUD) and limits the AUD/USD pair. OCBC analysts note that the local environment becomes less conducive to further tightening by the RBA because "the economy is slowing down, house prices have dropped quite considerably, and the level of unemployment is rising." In light of this, they note, "we do not expect any more interest rate hikes in this cycle, but rather anticipate a cut," signaling their belief that the cash rate is at a peak during this tightening cycle. Traders do not seem keen to take any directional bets now and are awaiting the US jobs data announcement, widely referred to as the Nonfarm Payrolls (NFP) report. In addition to this, FOMC speeches will give indications regarding the future course of action by the US Federal Reserve (Fed). Additionally, developments in the Middle East will drive momentum in the USD and the AUD/USD pair. Technically, the duo shows a mildly bearish near-term outlook, as price remains below the 200-day SMA at 0.7058 and under the tight Fibonacci retracement band starting at the 38.2% level at 0.7024. In addition, the Moving Average Convergence Divergence (MACD) prints a relatively positive value. At the same time, the Relative Strength Index (RSI) stays near the neutral 50 level, suggesting consolidation with no strong momentum. Therefore, an upside break above the 38.2% Fibonacci retracement level at 0.7024 will struggle to move higher and is likely to stall near the 200-day SMA at 0.7058. This is then followed by the 50.0% retracement at 0.7065, whereas further resistance is provided by the 61.8% Fibo. At 0.7105, the 78.6% level is at 0.7163, and the cycle high is near 0.7236. Conversely, near-term support may come in at the 23.6% Fibonacci retracement at 0.6974, before a bigger support base appears around the 0.6893 level of the current Fibonacci swing.