Australian Dollar bulls appear cautious below one-month high ahead of Aussie CPI and FOMC meeting

• The 100-day SMA continues to bar AUD/USD’s advance.
• US bond yields weigh on the USD as RBA rate rise expectations lend support to spot prices.
• Australia’s CPI release, the Fed’s decision and major US economic figures remain in focus.

Above the psychological 0.7000 level, AUD/USD remains supported during the Asian session despite easing slightly from the one-month high reached earlier on Monday. The pullback has yet to gather momentum.

Growing expectations of a further interest rate increase at the Reserve Bank of Australia’s (RBA) November policy meeting continue to underpin the Australian Dollar (AUD). Recent hawkish remarks by RBA Assistant Governor Sarah Hunter reinforced those expectations. She said inflation was not yet fully under control and that rates might have to rise further, given the risk that overseas price pressures could become embedded in the economy.

With US bond yields falling further and hopes of an easing in Middle East tensions, the US Dollar (USD) has struggled to build on Friday’s modest rebound from a three-week low. That backdrop could provide further support for AUD/USD. Buyers nevertheless appear reluctant to commit ahead of Wednesday’s latest Australian consumer inflation figures and the conclusion of the closely watched two-day FOMC monetary policy meeting.

Thursday’s advance US Q3 GDP estimate and US Personal Consumption Expenditures (PCE) Price Index will also be watched for guidance on the Federal Reserve’s (Fed) policy outlook, a key driver of the USD. Until then, uncertainty over geopolitics could underpin the dollar’s safe-haven appeal and limit AUD/USD’s gains. It therefore appears prudent to await a break above the 100-day Simple Moving Average (SMA) before positioning for a continuation of the short-term uptrend.

AUD/USD on the daily chart

Technical Outlook

Trading below the 100-day Simple Moving Average (SMA) at 0.7033 continues to constrain AUD/USD, which has also fallen back beneath the mid-range Fibonacci retracement levels. Initial support lies at the 38.2% Fibonacci retracement of 0.7025, with further buying interest expected around the 23.6% level at 0.6976. The broader structural floor sits near the Fibonacci anchor at 0.6896. On the upside, the 50.0% retracement at 0.7065 and the 61.8% level at 0.7105 could present resistance.

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