What are the technicals telling us?
The AUDUSD has moved higher after a shift in government leadership puts the pro-business Malcolm Turnbull in the Prime Minister seat. Traders are giving Turnbull a vote of confidence that he will be able to transition the economy from the mining economy to a more diversified one.
Technically, the pair is testing the September high price at 0.7152, and holding (the high reached 0.71508). The 50% of the move down from the August 11 high (at 0.74387) comes in at 0.71677. Trend line resistance from the daily chart come in at 0.7193. The high from August 28, comes in at 0.7205.
Looking at the hourly chart, the pair had a move higher than a quick fall. That fall found support buyers against the old remembered area low (between 0.7060-68). The push higher has taken the price above the topside trend line (admittedly, this line was broken and failed earlier today - see chart below). That line comes in at 0.7133 and traders will want to see the price stay above now and hopefully extend to new month highs as well.
The RBA kept rates unchanged at the last policy meeting on September 1. In the statement they said, the "Australian dollar is adjusting to the significant declines in key commodity prices" and that although the economy was growing at "somewhat below longer-term averages for some time". it had been "accompanied with somewhat stronger growth of employment and a steady rate of unemployment over the past year". China continues to be a wild card and risk to the downside. The Fed decision is also in play of course. Technically, the bias is more bullish at the moment with support below being eyed and a September high to be breached.
