AUD/USD at two-week lows as traders rush to price in RBA rate cut for October

Technical Analysis

Author: Justin Low | audusd

The aussie is the weakest performing major currency today

AUD/USD H1 19-09
The Australian jobs report earlier today wasn't exactly abysmal but it was nowhere near game-changing for the RBA and that set traders off to quickly price in another 25 bps rate cut going into next month's meeting.

Odds of a rate cut for October have jumped up from ~59% before the report release to around ~80% currently (mind you, the odds were ~21% at the end of last week). Continued calls by banks/financial institutions for an October cut isn't helping with that regard.

And that has led to the notable drop in the aussie to start the day. AUD/USD is currently testing swing region support around 0.6782 but beyond that, we could see price move towards a test of the 0.6700 region again as sellers stay in near-term control.

There aren't many notable risk events left between now and the RBA decision on 1 October so if there's ever a time that the central bank needs to push back against these expectations, next week's speech by RBA governor Lowe (24 September) will be crucial in getting that message across to markets.

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