Are Australian Dollar bulls holding back below a one-month high ahead of Australian CPI and the FOMC meeting?

• Can AUD/USD break through resistance at the 100-day SMA after repeated difficulty?
• Spot prices find support from RBA rate-hike expectations as US bond yields weigh on the USD.
• Australia’s CPI release, the Fed’s policy decision and major US economic data remain in focus.

Selling pressure on AUD/USD remains limited, with the pair holding above the psychological 0.7000 level during the Asian session despite easing from the one-month high reached earlier on Monday.

Growing expectations of another Reserve Bank of Australia (RBA) interest rate increase at its forthcoming November policy meeting continue to lend some support to 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 interest rates might have to rise further, given the risk that overseas price pressures could become entrenched in the economy.

With hopes of easing Middle East tensions and US bond yields declining further, the US Dollar (USD) is finding it difficult to build on Friday’s modest rebound from a three-week low. That backdrop could continue to favour AUD/USD. Buyers nevertheless appear reluctant to commit ahead of the latest Australian consumer inflation data and Wednesday’s outcome of the keenly awaited two-day FOMC monetary policy meeting.

Thursday’s Advance US Q3 GDP report and US Personal Consumption Expenditures (PCE) Price Index will offer traders further guidance on the Federal Reserve’s (Fed) future policy course, shaping the USD’s direction. Until then, geopolitical uncertainty could underpin the safe-haven dollar and restrict AUD/USD’s upside. It would therefore be 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: the daily chart

What does the technical outlook indicate?

Trading below the 100-day Simple Moving Average (SMA) at 0.7033, AUD/USD remains constrained and has slipped beneath the mid-range Fibonacci retracement levels once again. Potential resistance lies at the 50.0% retracement of 0.7065, followed by the 61.8% level at 0.7105. On the downside, the 38.2% Fibonacci retracement at 0.7025 provides initial support. Buying interest is expected further down near the 23.6% level at 0.6976, with the broader structural floor around the Fibonacci anchor of 0.6896.

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