AUD/USD Price Forecast: Support from 20-day EMA remains intact

• AUD/USD eases towards 0.7025 as the US Dollar recovers.
• Caution grips investors as next week’s US mid-term elections approach.
• Australia’s Q3 and September CPI readings showed stronger price pressures.

Cautious sentiment ahead of next week’s United States (US) mid-term elections is weighing on AUD/USD as the US Dollar recoups its earlier losses. During Friday’s European session, the Australian Dollar (AUD) is trading slightly lower against the US Dollar (USD), around 0.7025.

At the time of writing, the US Dollar Index (DXY) is largely unchanged near 101.82. The index tracks the Greenback against a basket of six major currencies.

Could US midterms bring divided government and policy gridlock?

A split between the White House and Congress appears likely, according to analysts at Commerzbank, who describe the US as “heading towards what is known as a ‘divided government’,”. Much of President Trump’s agenda could nevertheless proceed despite slower legislative progress. In areas central to him, the analysts observe, “such as foreign and trade policy, he has in any case relied primarily on executive orders recently,”.

Meanwhile, preliminary Gross Domestic Product (GDP) figures for the US showed stronger-than-expected growth in Q3.

The advance Q3 GDP estimate stood at “3.4% qoq annualised (Bloomberg consensus: 3.2%) vs 2.2% in Q2.” Commerzbank economists describe the US economy as having “expanded strongly by 3.4% in the third quarter of 2026,”. Consumer spending led the expansion: the economists note that “private consumption was the main driver and expanded 3.8%, at the same pace as Q2,”. Another sizeable contribution came from “business investment, particularly in IT,”. Price pressures also moderated, with the bank observing that “the GDP price index eased to 2.3% from 6.1% in Q2.”

Despite the strong figures, concerns surrounding hyperscalers’ Artificial Intelligence (AI) spending plans could see economic growth moderate, the bank has cautioned.

Explaining the expected slowdown, Commerzbank states that “financing conditions are no longer quite as favorable, and the boost from the AI boom is expected to subside, as is the stimulus from fiscal policy.”

In Australia, this week’s Consumer Price Index (CPI) releases for Q3 and September pointed to stronger price pressures.

Monthly CPI increased by a robust 0.8%, exceeding the 0.7% forecast and the previous reading of 0.4%. For July-September, the rise in prices matched expectations at 1.3%, accelerating from 0.6% in the preceding period.

AUD/USD Technical Analysis: Can the Modest Bullish Bias Hold?

A modest bullish bias remains visible on the daily AUD/USD chart, where the pair is trading at 0.7027. Following the recent rebound from below 0.70, the price is holding marginally above the 20-period exponential moving average (EMA) at 0.7013, suggesting that underlying demand is beginning to emerge.

At 51.7, the Relative Strength Index (RSI) sits near neutral with a slight upward tilt. This points to positive, though limited, upward momentum rather than an overstretched rally.

The first upside obstacle is the 29 October high of 0.7068. A decisive move above that level would bolster the case for further gains towards the 23 September high of 0.7119. On the downside, the 20-period EMA at 0.7013 provides immediate support; if sellers retake control, the broader psychological floor lies around 0.70.

(The technical analysis of this story was written with the help of an AI tool. Know more.)