AUD : Key Support

(Mon, 2 Nov 2020). The highly-scrutinized US presidential election is less than 2 days away, and polls continue to show former Vice President and Democratic nominee Joe Biden in the lead. The spread between him and Republican incumbent Donald Trump continues to hover in the rough 7-point average that Mr. Biden has kept for a few months.

However, votes for Mr. Trump may surge on election day, given that Republican voters are statistically more inclined to cast the ballot in-person than their mailing-inclined Democratic counterparts. A sudden spike could spark premonitions of another 2016-like election reaction where Mr. Trump was unexpectedly declared the winner. The result brought unusually high volatility as traders re-positioned themselves for an unexpected political environment.

AUD/USD OUTLOOK

AUD/USD appears to be reluctant to break below a multi-month inflection point dating back to December 2019 at 0.7018. From there, it oscillated between resistance and support. More recently it has functioned at the latter as it continues to be guided lower by steep descending resistance. Cracking that floor could open the door to retest the July lows at 0.6829.

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