AUD/USD Forecast: 0.7046 EMA in Focus Before RBA Rate Decision

The Australian dollar edged lower against the US dollar on Monday, with AUD/USD trading around 0.7020 during the Asian session, down approximately 0.15%. Investors remained cautious ahead of the Reserve Bank of Australia’s (RBA) November policy decision, scheduled for Tuesday. Expectations of another interest-rate increase have offered some support to the Australian dollar, but weaker Chinese manufacturing data and demand for the US dollar have limited its recovery. Technically, the pair remains below the 100-day exponential moving average (EMA) at 0.7046, leaving the next directional move dependent on the central bank’s decision.

RBA decision keeps traders cautious

The RBA began its November policy meeting on November 2, with its monetary policy decision scheduled for November 3. Economists and financial institutions have discussed the possibility of a 25-basis-point rate increase as Australian inflation remains elevated.

The Reserve Bank of Australia currently has its cash rate target at 4.60%. A further increase would tighten borrowing conditions and could support the Australian dollar by making Australian interest rates more attractive relative to those in other economies.

However, the expected move is not guaranteed. Investors will examine the RBA’s policy statement and Governor Michele Bullock’s comments for clues about whether further tightening is likely.

The Australian dollar also faces pressure from developments in China, one of Australia’s largest trading partners. China’s official manufacturing Purchasing Managers’ Index (PMI) fell to 49.3 in October from 50.1 in September, slipping below the 50-point threshold that separates expansion from contraction.

Meanwhile, geopolitical uncertainty has supported demand for the US dollar, adding another obstacle to AUD/USD gains.

AUD/USD remains below 0.7046 EMA

The technical structure shows that the pair’s recent recovery is losing momentum. AUD/USD trades below the 100-day EMA at 0.7046 and the 38.2% Fibonacci retracement at 0.7026.

Momentum indicators, however, do not yet confirm an aggressive bearish reversal. The Moving Average Convergence Divergence (MACD) remains marginally positive, with its line above the signal line, while the Relative Strength Index (RSI) sits near the neutral 50 level.

The combination points to weakening upside momentum but leaves room for consolidation.

Key technical levels include:

• Immediate resistance: 0.7026, followed by 0.7046.
• Higher resistance: 0.7067 and 0.7107.
• Additional upside barriers: 0.7165 and 0.7239.
• Initial support: 0.7000, followed by 0.6976.
• Major downside support: 0.6894.

RBA outcome may determine next move

A sustained move above 0.7046 would improve the near-term technical outlook and put the 0.7067 and 0.7107 Fibonacci levels in focus. A stronger advance could then expose resistance at 0.7165, with the cycle high near 0.7239 acting as a broader upside barrier.

On the downside, a break below the psychological 0.7000 level could expose support at 0.6976. Further weakness may bring the structural low near 0.6894 into view.

Conclusion:

AUD/USD remains caught between expectations of tighter RBA policy and external pressure from weaker Chinese manufacturing activity and US dollar demand. The 0.7046 100-day EMA is the immediate level bulls must reclaim to strengthen the recovery. Failure to break above it, followed by a move under 0.7000, would increase downside risks. The RBA’s November 3 decision is likely to provide the next major catalyst.