November 9th 2026 Chart of the Week: AUD/USD Tests Key Support Ahead of US CPI and FOMC

• US inflation metrics in focus: Markets are awaiting the US CPI release, which may significantly influence Federal Reserve rate expectations ahead of the December FOMC meeting.
• RBA rate hike yields “dovish hike” response: Despite the Reserve Bank of Australia raising the cash rate by 25 bps to 4.85%¹, AUD/USD broke below key support at 0.7000 as traders positioned ahead of a potential policy hold for December.
• Extreme COT positioning and oversold technicals: Institutional net short positioning on AUD has reached all-time extremes alongside oversold RSI and Stochastic readings, suggesting potential near-term consolidation or reversal.

As financial markets exit a volatile week following the US midterm elections, global investors and currency strategists are turning their focus to upcoming US inflation metrics. The U.S. Bureau of Labor Statistics (BLS) is scheduled to release the October Consumer Price Index (CPI) on Tuesday, November 10, at 8:30 a.m. ET¹, followed by the Producer Price Index (PPI) report on Friday, November 13, at 8:30 a.m. ET². Federal Reserve policymakers and market participants are closely monitoring these prints to gauge whether inflationary pressures are subsiding or accelerating, which will directly inform interest rate projections ahead of the December 9th 2026, Federal Open Market Committee (FOMC) decision³.

According to Bloomberg consensus expectations, headline CPI is projected to increase by 0.3% month-over-month in October (with survey averages centered near 0.29%), representing a moderation from September’s 0.6% gain. Core CPI, which excludes volatile food and energy components, is expected to advance 0.2% month-over-month. Notably, the BLS will omit year-over-year CPI comparisons in this release due to survey data collection suspensions during the October 2025 federal government shutdown. On the wholesale side, final demand PPI is forecasted to expand 0.4% month-over-month, down from September’s 1.3% advance, while the annual PPI rate is anticipated to tick up to 6.6% from 6.3%⁴.

Primary upward cost pressures earlier in the quarter stemmed from surging crude oil and fuel costs, which quickly filtered through to transportation, food logistics, and services⁵. However, last week’s sharp retreat in crude oil prices has potentially provided immediate relief across energy-sensitive supply chains. This pullback is helping to cool wholesale distribution surcharges before they fully translate into core consumer figures, relieving short-term inflation-expectation pressures.

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An upside surprise in CPI or PPI data would bolster hawkish policy expectations, prompting markets to price in higher terminal policy rates and pushing US Treasury yields higher. Conversely, soft prints would strengthen the case for a Federal Reserve rate pause or potential rate cuts, reinforcing the broad disinflation trend across the macro landscape.

The probability distribution for the 400–425 basis point (4.00%–4.25%) target rate range on the CME FedWatch tool for the December 9 FOMC meeting has seen a notable downward recalibration over the past week. Following the Fed’s October 28 pause—where the benchmark rate was held at 3.75%–4.00% amid two dissents advocating for a hike—fed funds futures initially priced an aggressive 80%–86% probability that the Fed would lift rates by 25 basis points into the 400–425 bracket in December. However, over recent sessions, this probability has drifted down toward the 60%–67% neighborhood, with the implied odds of the Fed remaining on hold at 375–400 basis points expanding to nearly 40%. This percentage decline reflects markets absorbing this week’s sudden drop in crude oil prices alongside softer forward inflation indicators, prompting traders to pare back an aggressive, hawkish repricing and reducing the perceived urgency for the FOMC to resume monetary tightening next month.

Australia’s inflation pressures have intensified, driven by broad-based services momentum and resilient domestic demand, with the headline Consumer Price Index rising to an annual 4.3% in September and the core trimmed mean gauge ticking up to 3.6%—remaining well above the Reserve Bank of Australia’s (RBA) 2%–3% target range. In response to these persistent price pressures and a material upward revision in staff inflation forecasts, the RBA took decisive action at its November 3 meeting, lifting the official cash rate by 25 basis points to 4.85% in a 6–3 majority decision. This move marked the central bank’s fifth rate increase of the year, decisively breaking away from prior expectations of an extended policy plateau⁶.

Despite the Reserve Bank of Australia lifting its cash rate by 25 basis points to an 18-year high of 4.85%⁷, the Australian dollar experienced a classic “dovish hike” reaction, weakening against major counterparts rather than surging. Against the U.S. dollar, the AUD slipped from above 0.7020 to trade below the psychologically crucial 0.70 level, eventually sliding toward 0.6870.

Money markets and 30-day interbank cash rate futures currently price in an overwhelming 97%–98% probability that the Monetary Policy Board will hold rates unchanged at its upcoming December 8 meeting, allowing policymakers time to evaluate the transmission of their five rate increases delivered this year⁷.

The CFTC Commitments of Traders (COT) report released on Friday, November 6th 2026, including data up to Tuesday, November 3rd, shows that speculative positioning on the Australian dollar remains deeply entrenched in bearish territory; however, it is important to note that:

• The asset manager/institutional net positions have reached and exceeded their all-time extreme-short levels, suggesting a potential change in sentiment.
• A positive divergence can also be identified on the chart above, as net position levels are moving sideways while price action has dropped by approx. 2.7% over the past 2 weeks, significantly below multiple support and psychological levels.

• Following a break above the upper boundary of a descending channel in February 2025, price action has traded within a widening formation. The pair continued to respect pattern boundaries, except for the volatility surrounding the Liberation Day tariff announcements on April 2, 2025.
• As of early 2026, spot prices transitioned into a broader consolidation regime. Initial bullish momentum peaked at 0.7250, followed by a series of lower highs before the price declined toward the core red baseline.
• In late October and early November, price action broke below multiple critical support levels, including the Monthly Pivot Point (0.6998), the psychological 0.7000 handle, the Weekly Pivot Point (0.6918), as well as the 9 EMA, 9 SMA, and 21 SMA. The broken levels currently represent a confluence of resistance above price action.
• Relative strength index (RSI 14): Remains in line with overall price action, currently attempting a slight upward move after reaching oversold territory.
• Stochastic Oscillator: Crossings below oversold thresholds indicate deeply stretched conditions, with the %K line attempting an upward cross above the %D line, signalling a potential reversal attempt/consolidation phase.

In summary, global macro dynamics remain tightly anchored to upcoming US inflation metrics, which will dictate the Federal Reserve’s policy trajectory ahead of the December FOMC decision. Concurrently, Australian inflation pressures have driven the RBA to resume monetary tightening, yet AUD/USD price action exhibits a classic “dovish hike” re-pricing. Technically, while spot prices remain under pressure below key resistance confluences, extreme short speculative positioning alongside oversold momentum indicators suggests the potential for near-term consolidation or a sentiment reversal.

Abbreviation list:

RBA: Reserve Bank of Australia

FOMC: Federal Open Market Committee

EMA: Exponential moving average

SMA: Simple moving average

RSI: Relative strength index

% K: Fast stochastic

% D: Slow stochastic

MACD: Moving average convergence divergence

Pivot point: PP

Support: S

Resistance: R