Many trader are anticipating a 25bp cut ahead in next week's RBA announcement and have sold AUDUSD ahead of the risk event. However there are aplenty reason why RBA will stick to its "wait and watch" approach.
In China, markets begin a week long
holiday with speculation a further stimulus package could be announced over the national festival. However, some analysts think a major package is unlikely ahead of the leadership change due in the next six to eight weeks. Similarly, in the US, the political and therefore fiscal landscape could change dramatically after presidential elections in the first week of November.
In Technical case, AUDUSD has cleared the descending trendline which has capped it since mid-Sep. Next hurdle for bulls comes at 1.05.
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