Australian Dollar stays near monthly high, holding above 0.7000 despite USD recovery

Conflicting drivers leave AUD/USD without a clear intraday trend on Friday.
While the RBA's hawkish stance supports the Aussie, a slightly firmer USD restrains the pair.
Next week's FOMC meeting and key US economic releases are now in focus.

Strong weekly gains still look likely for AUD/USD, although the pair alternates between modest advances and small declines in Friday's Asian session. It has struggled to build on the previous day's rebound from below 0.7000. Even so, a favourable fundamental backdrop keeps spot prices near the monthly high reached on Thursday.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Support for the Australian Dollar (AUD) continues to come from recent hawkish remarks by Reserve Bank of Australia (RBA) officials. Earlier this week, RBA Assistant Governor Christopher Kent noted reasonable indications of rising neutral rates, both in Australia and globally. On Thursday, RBA Deputy Governor Andrew Hauser also cautioned that Q3 trimmed-mean inflation could exceed expectations. His warning has kept expectations of a rate hike in play ahead of the 3 November policy meeting.

Further support for the Aussie comes from China's stronger-than-expected GDP figures: the economy expanded by 4.5% year-on-year in the third quarter, against 4.3% in the second quarter. However, buying interest in the US Dollar (USD) has helped it recover modestly from Thursday's three-week low. With that recovery discouraging fresh bullish positions in AUD/USD, caution is warranted before positioning for a continuation of the week-long uptrend.

Although Federal Reserve (Fed) officials have recently indicated that interest rate increases are not urgent, traders continue to price in around an 80% probability of another rise in US borrowing costs in December. Concerns about oil-led inflation also support the prospect of additional Fed tightening. Together with continuing geopolitical uncertainty over escalating Middle East tensions and the US-Iran standoff, these factors are reviving demand for the safe-haven dollar and limiting AUD/USD's upside.

Before taking fresh directional positions, traders also appear inclined to await clearer signals on the Fed's policy trajectory. Attention therefore centres on the outcome of the two-day FOMC policy meeting, due next Wednesday. Also on next week's calendar are the Advance Q3 GDP estimate and the Personal Consumption Expenditures (PCE) Price Index. These important US releases will be key drivers of near-term USD movements and should provide meaningful impetus to AUD/USD.

What does the AUD/USD daily chart show?

Can AUD/USD Clear Technical Resistance?

Overhead resistance continues to constrain AUD/USD, with the pair trading below the 100-day Simple Moving Average (SMA) at 0.7033 and a closely packed Fibonacci resistance zone spanning the 38.2% retracement at 0.7028 and the 50.0% level at 0.7069. Failure to regain this cluster of technical hurdles indicates that rallies remain vulnerable as sellers defend the downtrend originating at the 0.7242 swing high.

The first downside support lies at 0.6977, the 23.6% Fibo. retracement. Below that, the 0.6896 swing low offers a deeper floor, where stronger buying interest would be expected should the current decline continue.

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

How Is the US Dollar Performing Today?

The US Dollar recorded its strongest performance against the Japanese Yen today. Its percentage moves against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.03%	0.04%	0.11%	-0.01%	0.10%	-0.23%	0.07%
EUR	-0.03%		0.03%	0.07%	-0.04%	0.06%	-0.25%	0.05%
GBP	-0.04%	-0.03%		0.04%	-0.04%	0.03%	-0.27%	0.02%
JPY	-0.11%	-0.07%	-0.04%		-0.11%	-0.01%	-0.34%	-0.03%
CAD	0.00%	0.04%	0.04%	0.11%		0.11%	-0.23%	0.08%
AUD	-0.10%	-0.06%	-0.03%	0.01%	-0.11%		-0.32%	-0.02%
NZD	0.23%	0.25%	0.27%	0.34%	0.23%	0.32%		0.31%
CHF	-0.07%	-0.05%	-0.02%	0.03%	-0.08%	0.02%	-0.31%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the US Dollar on the left and following its row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the intersecting cell.