0.68 test for Australian Dollar as Fed hawks propel USD to 19-month high

• 0.67% fall takes AUD/USD towards key support at 0.6800.
• 19-month highs for the Dollar as markets anticipate Fed tightening.
• 87% probability of a December rate rise as US PPI approaches.

AUD/USD lost a further 0.67% on Thursday. Slightly weaker-than-expected US jobs figures failed to halt the Australian Dollar’s decline against the US Dollar. Hawkish voices at the Federal Reserve (Fed) supported the Greenback, taking it to 19-month highs. AUD/USD is trading around 0.6800.

0.6800 in focus as hawkish Fed comments weigh on AUD/USD

Expectations of a Fed rate increase of at least 25 basis points in December pushed the US Dollar Index (DXY) to a multi-month peak of 103.24. The index tracks the US currency against a basket of six currencies.

Comments from Fed officials took precedence over US economic releases on Thursday, as most policymakers leaned towards a moderately hawkish position.

A worsening inflation outlook was highlighted by Cleveland Fed's Beth Hammack, although she favours a gradual approach to interest rates. Chicago Fed’s Austan Goolsbee described inflation as “well above target,” while San Francisco Fed’s Mary Daly recognised the need for additional tightening, saying inflation pressure “is up, not down.” Kansas City Fed’s Jeffrey Schmid, meanwhile, said the Fed had yet to defeat inflation.

According to the CME FedWatch Tool, money markets assigned an 87% probability to a 0.25% Fed rate increase. A larger 50-basis-point rise carried a slim 13% probability.

For the week ending 7 November, US initial jobless claims increased to 200K, exceeding the 195K forecast and the previous 191K reading. Continuing claims, by contrast, declined to 1.697 million from 1.717 million, signalling labour market resilience. The subsequent Existing Home Sales release showed a -5.5% change from September, with sales falling to 3.75 million from 3.97 million.

On geopolitics, a social media post by US President Donald Trump said the US does not need an agreement with Iran, keeping further strikes possible. That contradicted his statement two days earlier that new strikes were unnecessary.

Australia’s economic calendar is sparse on Friday. Activity would pick up next week with the minutes of the Reserve Bank of Australia’s (RBA) latest meeting and a speech by Governor Michelle Bullock on 17 November.

The US calendar includes the Producer Price Index (PPI). Forecasts put annual headline PPI at 6.6%, up from 6.3%, while the core reading is expected to hold at 5%.

0.6805 AUD/USD: Technical Price Forecast

At 0.6805 on the daily chart, AUD/USD retains a bearish near-term bias. Spot remains substantially below the cluster of three simple moving averages around 0.7020 and a sequence of breached rising trend lines beginning at 0.6926. With the Relative Strength Index (14) at 32.58, just above oversold levels, the signal points to persistent selling pressure rather than clear exhaustion. Trading beneath these structural barriers leaves the pair exposed to further weakness.

The former rising support trend line near 0.6926 provides the first upside resistance. Beyond it lie the triple simple moving average (SMA) area around 0.7020, a further breached trend line at 0.7137 and a more substantial horizontal barrier near 0.7198. If the decline continues, the principal downside support is around 0.6342, the earlier breakout point through a falling resistance trend line. Buyers would be expected to show stronger interest there.

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