According to the AUD/USD chart today, the Australian dollar has climbed to its highest level in three weeks. The currency’s strength stems from the following factors:
→ Australia’s monthly consumer price index (CPI) came in stronger than expected. According to Forex Factory, annual inflation reached 3.5%, compared with analysts’ forecasts of 3.1%. This marks the highest reading since July 2024, pointing to renewed inflationary pressure.
→ As a result, traders have significantly reduced bets on further monetary easing. Data from Trading Economics shows that the probability of the Reserve Bank of Australia keeping its interest rate unchanged at 3.6% at its 4 November meeting is now close to 90%.
Technical Analysis of the AUD/USD Chart
Since mid-September, movements in the AUD/USD pair have formed a descending channel (shown in red), built on a series of lower highs and lows starting from point A.
However, note that in mid-October:
→ the price dipped below the lower boundary;
→ the RSI indicator entered oversold territory;
→ candles displayed large bodies;
→ an inverted head and shoulders reversal pattern emerged.
From a Smart Money Concept perspective, it is reasonable to assume that within the area marked by the purple rectangle, Smart Money was accumulating sellers’ liquidity to build long positions.
Following this, the Australian dollar showed strong momentum as the price broke through:
→ resistance at 0.6520 near the channel’s median (forming a bullish gap in the process);
→ the upper boundary of the red channel around 0.6565.
Building on this view → the price now appears to be moving towards a liquidity zone, where Smart Money could find sufficient buy-side liquidity. This area may lie above the 0.6630 level, which previously acted as resistance in early October.
It is also possible that today’s Federal Reserve decision (the Federal Funds Rate announcement scheduled for 21:00 GMT+3) will help this scenario play out.
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