AUD/USD began the week softer, giving back part of Friday’s rise and hovering around 0.7000 as the US Dollar stayed firm ahead of key data and the Federal Reserve decision. The pair is still below its 200‑day SMA near 0.7050, while near-term trading has been capped under the 100‑day SMA at 0.7033, with the 55‑day SMA at 0.7073. Australia’s backdrop is mixed: manufacturing PMI edged up to 49.5 in September but services slipped to 47.8 from 51.9, and the trade surplus narrowed to A$0.495 billion from a revised A$1.351 billion. GDP rose 0.4% QoQ in Q2 2026 and 2.1% YoY, while unemployment held at 4.7 and employment fell 39.3K after a revised 29.3K rise; trimmed mean inflation was 3.6% and headline CPI 4.0%, with expectations at 5.3% in October.
Australian Economic Overview and Policy Outlook
Australia’s backdrop is mixed: manufacturing PMI edged up to 49.5 in September but services slipped to 47.8 from 51.9, and the trade surplus narrowed to A$0.495 billion from a revised A$1.351 billion. GDP rose 0.4% QoQ in Q2 2026 and 2.1% YoY, while unemployment held at 4.7 and employment fell 39.3K after a revised 29.3K rise; trimmed mean inflation was 3.6% and headline CPI 4.0%, with expectations at 5.3% in October. The RBA lifted its OCR 25 bps to 4.60%; markets price about 20 bps more tightening by year-end.
Chinese Economic Data and Market Positioning
China provided steadier inputs, with GDP up 4.5% YoY, industrial production at 5.5% YoY and 5.3% YTD, and a September trade surplus of $133.53 billion alongside retail sales growth of 1.1%. PMI readings improved, including NBS manufacturing at 50.1 and services at 50.2, while private measures showed manufacturing at 52.1 and services at 51.6; CPI ran at 0.9% YoY and 0.2% m/m, and PPI was 5.0% YoY. The PBoC kept LPR at 3.00% (one‑year) and 3.50% (five‑year). Positioning remains stretched, with CFTC net shorts near 127.3K contracts and open interest just over 333K, even as one‑month 25‑delta risk reversal improved to -0.959 from -1.047; spot trades near 0.7025, with resistance at 0.7033, 0.7053 and 0.7079, and supports at 0.6894, 0.6860 and 0.6833.
