AUD/USD looks to close modestly higher, stays below 0.7050 as focus shifts to RBA

• AUD/USD looks to snap four-day losing streak on Monday.
• RBA is expected to lower its policy rate to 0.1%.
• Greenback stays resilient ahead of US presidential election.

The AUD/USD pair started the new week in a calm manner and started to edge higher with risk flows helping the risk-sensitive AUD gather strength against its rivals. After touching a fresh daily high of 0.7054, however, the pair seems to have gone into a consolidation phase as investors shift their focus to the Reserve Bank of Australia's (RBA) policy announcements. As of writing, AUD/USD was up 0.2% on the day at 0.7040.

Key events coming up for AUD/USD

In the early trading hours of the Asian session, the RBA is expected to lower its policy rate to 0.1% from 0.25%. Some experts also think that the RBA could expand its quantitative easing by AUD100 billion.

Previewing this event, “If the RBA does not match expectations with the extent of the easing measures, there may be some room for a relief rally in AUD/USD," said Rabobank analysts. "That said, due to its gas exports the AUD cannot escape being linked with the oil price which is under pressure on fears of a demand slump. Also weighing on the AUD are fresh headlines referencing tensions between Australian and China.”

Reserve Bank of Australia Preview: Forecast from six major banks.

With the RBA out of the way, investors will turn their attention to the US presidential election. Meanwhile, the US Dollar Index is up 0.32% on the day at 94.18, pointing out to a cautious market mood despite the strong gains witnessed in Wall Street's main indexes. 

Earlier in the day, the data published by the ISM and the IHS Markit both showed that the business activity in the manufacturing sector continued to grow at an impressive pace in October but was largely ignored by market participants.

Technical levels to watch for