AUD/USD Breaks Below 0.6950 as RBA Hike Bets Fade

Summary:

AUD/USD falls below 0.6950 after Australia unexpectedly loses 39,300 jobs and unemployment rises to 4.7%. Reduced RBA hike expectations and continued US Dollar support keep the pair under pressure.

Sell AUDUSD

EXP

Trading

0.69100

ENTRY

0.67500

TGT

0.69700

0.69435 +0.00234 +0.34%

Point

Flat

0.67500

TGT

CLOSING

0.69100

ENTRY

0.69700

The Australian Dollar came under significant selling pressure on Thursday after disappointing employment figures weakened expectations of further monetary tightening by the Reserve Bank of Australia (RBA). AUD/USD retreated below 0.6950, extending its decline from the two-week high above 0.7000 reached during the previous session.

Australia's latest labour market report revealed a sharper-than-expected deterioration in employment conditions. The economy lost 39,300 jobs in September, reversing August's 39,500 increase and falling considerably short of forecasts for 20,000 new positions. Meanwhile, the unemployment rate climbed to 4.7% from 4.6%, raising concerns about weakening labour demand.

The disappointing figures have complicated the RBA's monetary policy outlook, reducing confidence that policymakers will deliver another interest rate increase. This shift in expectations has weighed heavily on the Australian Dollar, leaving the currency vulnerable to additional selling pressure.

Meanwhile, the US Dollar has regained some momentum after retreating from its strongest levels since April 2025. Although declining Treasury yields have limited the Greenback's recovery, persistent geopolitical uncertainty and expectations of another Federal Reserve rate hike before year-end continue to provide underlying support.

Attention now turns to the upcoming US Producer Price Index report, which could offer further insight into inflationary pressures and the Fed's tightening outlook. Investors will also closely monitor Fed Chair Kevin Warsh's remarks at the IMF and World Bank meetings in Bangkok on Friday.

The near-term outlook for AUD/USD remains bearish, with weaker Australian employment conditions and diverging monetary policy expectations favouring the US Dollar. Unless incoming US data significantly weakens the case for further Fed tightening, the Australian Dollar could struggle to establish a sustained recovery.

Technical Analysis

The Australian Dollar remains firmly under bearish pressure against the US Dollar, with the 4-hour chart revealing a significant deterioration in market structure. AUD/USD has extended its decline toward 0.6910 following a sharp rejection from the 0.7000–0.7010 resistance region, reinforcing the broader sequence of lower highs and lower lows that has dominated price action since September.

The latest decline is particularly significant as the pair has broken below a short-term ascending trendline that previously supported its recovery from the 0.6900 region. This trendline breakdown, combined with the rejection at the psychological 0.7000 threshold, suggests that the recent consolidation was merely a temporary correction within the prevailing bearish trend rather than the beginning of a sustained bullish reversal.

Attention now shifts toward the 0.6930–0.6940 region, which previously provided support but has now been breached. A corrective rebound toward this area could attract renewed selling interest, particularly if buyers fail to reclaim the broken ascending trendline. As long as prices remain below 0.6960, the immediate technical outlook continues to favour sellers.

On the downside, the next important support is located around 0.6865–0.6875, where previous price reactions suggest some buying interest could emerge. However, a decisive break beneath this region would strengthen bearish momentum and expose the 0.6820 psychological area, followed by a deeper decline toward 0.6740–0.6750, consistent with the projected bearish continuation on the chart.

Conversely, a sustained recovery above 0.6960 would weaken immediate selling pressure and potentially encourage another attempt toward 0.7000–0.7010. A decisive breakout above this resistance would be required to challenge the current bearish structure, with additional resistance positioned around 0.7065–0.7070.

Overall, the technical picture suggests that AUD/USD remains vulnerable to further losses, particularly following the breakdown of its short-term recovery structure. Although temporary rebounds cannot be ruled out, these are likely to encounter resistance unless buyers regain control above the recently broken support levels.

TRADE RECOMMENDATION

SELL AUD/USD

ENTRY PRICE: 0.6910

STOP LOSS: 0.6970

TAKE PROFIT: 0.6750

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Warren Takunda

Analysts

Warren Takunda, a seasoned finance leader specializing in the Middle East, is a trusted senior analyst with a proven track record. As head of the finance team, he excels in financial planning, analysis, and reporting. Warren's expertise in financial modeling and investment analysis delivers valuable insights to clients.

Rank

Articless

3126

Win Rate

63.77%

P/L Ratio

0.73

Focus on

XAUUSD, EURUSD, GBPUSD

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