The Australian Dollar slipped by 0.10% against the US Dollar as market sentiment worsened due to diminishing hopes for peace between the US and Iran. This has resulted in a rise in US bond yields and a decline in US stock markets. The AUD/USD is currently at 0.7016.
AUD/USD Remains Steady Amid Geopolitical Uncertainty and Rate Expectations
The economic data from the US was limited, with the Dallas Fed manufacturing index dropping by 1.8 points to 9.8 in September, although it’s still above its historical average of 0.3. Geopolitical events and comments from Fed officials were the main focus of attention.
Fed Governor Lisa Cook mentioned that she anticipates inflationary pressures to increase in the next few months, primarily spurred by artificial intelligence advancements and the ongoing US-Iran situation. She also noted that the job market seems resilient enough to handle a series of interest rate hikes aimed at combating inflation.
In Australia, the Reserve Bank of Australia (RBA) is likely to increase rates by 25 basis points from 4.60% to 4.85%, marking the highest point since 2008. Analysts at ANZ expect a divided vote on this decision, largely due to differences in timing and preferences.
According to data from Prime Terminal, money markets are fully anticipating a rate hike from the RBA on September 29.
Post-RBA decision, traders will be looking forward to Australia’s inflation report and August’s Trade Balance. In the US, critical data on jobs, the Federal Reserve’s preferred inflation measure (Core PCE), and September’s Nonfarm Payrolls report are on investors’ radar.
AUD/USD Price Outlook: Technical Perspective
On the daily chart, AUD/USD is trading at around 0.7017, maintaining a bearish short-term outlook as it falls below the clustered 100-day and 50-day simple moving averages (SMAs), currently capping the pair at 0.7044 and 0.7093, respectively. The 200-day SMA at 0.6993 serves as underlying support, yet the Relative Strength Index (RSI) at 34 indicates ongoing downward pressure, with the pair tilting toward oversold conditions rather than showing signs of a solid recovery.
On the upside, initial resistance can be found at the 100-day SMA near 0.7044, followed closely by the 50-day SMA around 0.7093. Additionally, there is a horizontal resistance level at 0.7198, coupled with a broader downward trend line that together shape a stronger supply zone further up. To the downside, immediate support aligns with the 200-day SMA close to 0.6993, while a series of rising trend lines from the 0.6865 to 0.6833 levels present further structural support during any deeper pullbacks.
Australian Dollar Performance This Month
The following table outlines the percentage changes of the Australian Dollar (AUD) against various major currencies this month, indicating that the Australian Dollar has performed the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.17% | 2.23% | -1.45% | 2.32% | 2.13% | 4.44% | 2.90% | |
| EUR | -2.17% | 0.08% | -3.54% | 0.14% | -0.03% | 2.22% | 0.72% | |
| GBP | -2.23% | -0.08% | -3.63% | 0.07% | -0.12% | 2.15% | 0.67% | |
| JPY | 1.45% | 3.54% | 3.63% | 3.81% | 3.64% | 5.91% | 4.48% | |
| CAD | -2.32% | -0.14% | -0.07% | -3.81% | -0.16% | 2.02% | 0.58% | |
| AUD | -2.13% | 0.03% | 0.12% | -3.64% | 0.16% | 2.26% | 0.78% | |
| NZD | -4.44% | -2.22% | -2.15% | -5.91% | -2.02% | -2.26% | -1.48% | |
| CHF | -2.90% | -0.72% | -0.67% | -4.48% | -0.58% | -0.78% | 1.48% |
The heat map illustrates the percentage changes of major currencies against each other, with the base currency indicated in the left column and the quote currency in the top row. For instance, selecting the Australian Dollar from the left side and moving horizontally to the US Dollar, the percentage change shown will reflect the performance of AUD relative to USD.
