RBA Governor Stevens' comments led to a sell-off in the Aussie as he intimated that while they are content with leaving monetary policy on hold, the recent appreciation of the currency is acting as an inhibitor to future growth prospects. The issue here seems to be that the inherent yield advantage that this unit enjoys has been quite instrumental for its rise which is negating the effects of the accommodative policy adopted by them as they attempt to reignite domestic growth. This might force them to consider further easing if this trend continues. He also stressed that they are keeping a close eye on credit growth and the housing market.
AUD/USD is currently carving out a parallel channel after having been rebuffed around the 0.9750 level, which is roughly the 50% retracement of the down move from 1.0582 to 0.8841. Today's price action sees the pair targeting the key support zone between 0.9480 / 0.9515 in the near term with the former also defining the lower boundary of the parallel channel. As of now, this move has to be viewed as a correction of the recent rise (which still has to be viewed as a correction of the larger down move), but a clear breach will bring back the prospects of the longer term downtrend re-asserting itself. Only a break back above the 200 DMA, which is currently at 0.9735, and the recent highs of 0.9757 will bring the focus back for a test of 0.9830 and beyond.
Japan’s unemployment rate for September came out at +4.0% which was in line with market expectations but lower than last month's reading of +4.1% while Household Spending rose to +3.7%, higher than estimates of +0.5%. Additionally, Retail Sales rose by +3.1% exceeding forecasts of +1.9%.