The penultimate meeting of the Reserve Bank of Australia will be held tomorrow. On the eve of this event, the pair AUD/USD crept into the area of its key resistance level of 0.7000, and now trading at the 69th figure. In July, the "Aussie" "dived" under this target, and since then, buyers can not return above this value. Bulls were selected several times in the specified price area, but in each case they failed. However, today, the bulls of the pair have every chance to gain a foothold in the 70th figure if the RBA members surprise the market with a "hawkish" mood. Although the probability of such a scenario is quite small.

Here, it is necessary to make a small divergence, recalling the reasons for the growth of the Australian dollar in October. The upward dynamics of AUD/USD was due, firstly, to the release of data on the growth of the Australian labor market, and secondly, to the weakness of the US currency. On the other hand, Australia's unemployment rate unexpectedly dropped to 5.2%, and the increase in the number of employees amounted to almost 15 thousand, mainly due to full employment (this component jumped by 26 thousand), while part-time employment, on the contrary, showed a negative trend, decreasing by 11.4 thousand.

However, the figures themselves did not play a decisive role - the trend itself is important here, especially in light of the previous statements by the head of the RBA, Philip Lowe. In one of his speeches, the head of the Australian regulator expressed the opinion that the unemployment rate should ideally be reduced to 4.5% - only in this case, according to Lowe, the labor market will put upward pressure on wages. In other words, the head of the RBA increased the importance of data on the labor market, linking the dynamics of these indicators with the growth of inflation indicators.

Speaking last week, Philip Lowe voiced this rhetoric again, while allowing the option of lowering rates in the near future. He said that the regulator is ready to further soften monetary policy, as these steps help the economy and support a "soft" turning point in economic growth. In addition, he assured market participants that rates would remain low for a "long period" of time, but at the same time, he ruled out the option of negative rates.

It would seem that amid such rhetoric, the Australian dollar should have collapsed throughout the market, since the head of the RBA actually gave a "green light" to the rate cut. However, the market reaction was the opposite - the AUD/USD pair rose 150 points in a few days. Such an "abnormal" reaction is explained by the fact that Lowe also focused on the side effects of low interest rates. He acknowledged that their decline "brings harm and damage to those people who rely on interest income." Also, the head of the RBA said that under ideal conditions, the growth of key economic indicators should be due to improved investment environment, fiscal stimulus and structural reforms, and not only due to the actions of the Central Bank. Such remarks reassured investors, although in fact, Lowe did not rule out the possibility of lowering the rate by the end of this year.

Today, the probability of a rate cut at the November meeting of the RBA is 40/60 - the market is more likely to see the regulator take a wait-and-see position, and if there are any such intentions, it will announce easing of monetary policy at the December meeting. But even cautious steps of a verbal nature can undermine the position of the "Aussie" It is likely that Philip Lowe will declare that the rate cut should stimulate economic growth again to a level sufficient to reduce unemployment to 4.5%. And in this case, the focus of the market will shift to the Australian labor market again. If Lowe, nevertheless, takes a wait-and-see position, the pair has every chance to test the level of 0.7000 having consolidated in the region of the 70th figure. The AUD/USD bulls will indicate the priority of the upward movement.

At the moment, the price is at 0.6920, and the Ichimoku indicator has formed a bullish signal "Parade of lines" on the daily chart. This suggests that the pair AUD/USD has the potential for its further recovery, unless fears of a decline in the RBA interest rate in December return to the market. On the weekly chart, the pair consolidated above the middle line of the Bollinger Bands indicator. The price is also above the Tenkan-sen and Kijun-sen lines, which are located under the Kumo cloud, thus forming the Golden Cross signal, which signals an increased possibility of changing the trend from down to up. The closest resistance level is at 0.7010 - this is the lower border of the Kumo cloud, which coincides with the middle line of the Bollinger Bands on W1.