AUD/USD Holds Near 0.6565 Ahead of Trump–Xi Meeting in Korea

The escalating trade tensions, following China’s export restrictions on rare earth metals and Washington’s plan to impose 100% tariffs on imports starting November 1, are directly impacting Australia’s economy. China remains Australia’s largest trading partner, and fluctuations in the yuan closely correlate with movements in the Australian dollar. Meanwhile, the October S&P Global Manufacturing PMI in Australia is expected to decline from 51.4 to 49.7, while the Services PMI may rise from 52.4 to 53.1. As a result, the composite index is forecast to reach 52.6, up from 52.4 previously.

The U.S. dollar index (USDX) holds near 98.30 as investors await the outcome of the Federal Reserve meeting scheduled for tomorrow at 20:00 (GMT+2). However, most macroeconomic data that could influence the Fed’s decision remain unavailable due to the ongoing government shutdown. Inflation data showing restrained growth support the central bank’s dovish tone. According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut stands at 97.8%.

Support and Resistance Levels

On the daily chart, the pair is undergoing a correction, retreating from the lower boundary of the ascending channel with dynamic limits between 0.6780 and 0.6480.

Technical indicators maintain a bearish bias that may soon turn bullish. The fast EMA lines of the Alligator indicator are directed upward, approaching the signal line, while the Awesome Oscillator (AO) histogram has formed several rising bars in the negative zone.

Resistance levels: 0.6590, 0.6710.

Support levels: 0.6520, 0.6410.

Trading Scenarios and AUD/USD Outlook

Long positions may be considered after a rise and consolidation above 0.6590 with a target at 0.6710. Stop-loss: 0.6530. Implementation period: 7 days or more.

Short positions may be opened after a decline and consolidation below 0.6520 with a target at 0.6410. Stop-loss: 0.6600.