Takeaway

The presenter argues that despite the RBA delivering a fourth rate hike to 4.6%, the Australian Dollar faces continued downward momentum into Q4, compounded by negative October seasonality (falling in 80% of Octobers over the last decade). With domestic macro softening via rising unemployment and falling house prices, the RBA may have reached its cycle peak, shifting actionable focus toward cross setups—specifically buying pullbacks in AUD/NZD or positioning for downside breaks in AUD/JPY.

What the presenter said

• [00:04] The RBA raised its Cash Rate Target to 4.6% (a cumulative 100 bps hike this cycle), but market pricing suggests traders do not anticipate further hikes in the near term.
• [00:16] Traders were caught off guard by the RBA press conference, which revealed no discussion took place regarding a 50 bps move.
• [00:23] Domestic fundamentals are deteriorating: inflation remains high, but unemployment is rising faster than expected and house prices are trending broadly lower, making further hikes this year uncertain [00:30].
• [00:34] Surging global bond yields, a hawkish Federal Reserve, and Middle East tensions drove a weak end to Q3, following a 3% drop in September [01:20].
• [01:10] October seasonality is structurally weak: the AUD has declined in October for four consecutive years (averaging -1.8%) and has posted positive returns in only 20% of Octobers over the past decade [01:15].
• [01:53] Overall AUD momentum has turned lower across all crosses, though performance varies by pair.
• [02:11] AUD/NZD remains in a dominant uptrend with a constructive pullback, whereas AUD/CAD requires patience because a break below its current lows would signal a deeper correction [02:27].
• [02:31] AUD/JPY is hovering at range lows; Bank of Japan intervention limits upside, and the pair is expected to break to new lows later in the year [02:43].
• [02:48] EUR/AUD is testing resistance around 1.62 in a possible bullish triangle formation, while AUD/GBP is carving out a potential head-and-shoulders top [02:57].
• [03:07] AUD/USD is technically bearish, but its proximity to range lows warrants caution for short positioning [03:16].

Trade ideas

• AUD/NZD
  • Direction: Long
  • Entry / Target / Stop: None stated (looking for evidence of a swing low on the pullback)
  • Horizon: Short-term
  • Conviction: Medium
• AUD/JPY
  • Direction: Short
  • Entry / Target / Stop: None stated (positioning for an eventual break to new lows)
  • Horizon: Short-term
  • Conviction: Medium
• EUR/AUD
  • Direction: Long
  • Entry / Target / Stop: None stated (watching for a breakout above resistance)
  • Horizon: Short-term
  • Conviction: Low
• AUD/GBP
  • Direction: Short
  • Entry / Target / Stop: None stated (trading a potential head-and-shoulders top)
  • Horizon: Short-term
  • Conviction: Low
• AUD/USD
  • Direction: Short
  • Entry / Target / Stop: None stated (bearish bias, but cautioned due to range lows)
  • Horizon: Short-term
  • Conviction: Low

Levels and data cited

• RBA Cash Rate Target: 4.6% current rate (+100 bps total for the cycle).
• EUR/AUD: 1.62 resistance level.
• StoneX AUD Seasonality Data: -1.8% average return in October over the last 4 years; positive in only 20% of Octobers over the last decade.
• Recent Performance: -3.0% loss in September.

Risks and what would invalidate this

• Bank of Japan intervention in the Yen distorting AUD/JPY price action.
• Taking counter-trend positions against the prevailing downward momentum across AUD crosses.
• Structural breaks below key support levels triggering deeper pullbacks (e.g., AUD/CAD).
• AUD/USD proximity to range lows creating bounce risk for short entries.