Australian Dollar drifts toward 0.69 as USD shrugs off Fed patience

• AUD/USD slips as Dollar extends winning streak into fourth day.
• Fed hold odds reach 70%, but US data stay resilient.
• September NFP now becomes next test for Aussie downside.

The Aussie Dollar drifts lower, down 0.26% against the US Dollar, as the latter extends its gains for the fourth straight day amid continued trimming of Fed-hawkish bets, while Fed policymakers suggest patience is warranted ahead of the October 28 meeting. The AUD/USD trades at 0.6928.

AUD/USD weakens despite fading Fed hike bets as resilient US data dominate

Sentiment has improved during the day, despite harsh comments by US President Donald Trump, who reiterated that Iran will never have a nuclear weapon. In earlier comments, he said that the war will end soon, one way or the other and that he expects to resume bombing Iran in November.

Fed officials, including Vice Chairman Philip Jefferson, indicated the economy is near maximum employment and emphasised patience on rate changes. Meanwhile, Minneapolis Fed President Neel Kashkari advocated for more rate hikes.

Key data in the US were released on Thursday, led by the ISM Manufacturing PMI, which was little changed at 54.5, down from 54.6 and below forecasts. Digging into the report, New Orders improved, the Employment Index continued to expand, and Prices Paid jumped sharply from 71.1 to 77.9, indicating high energy prices.

On the jobs data, jobless claims for the week ending September 26 were 197K, below estimates and the previous week's downward-revised figure to 198K.

Given the backdrop, recent data show the economy remains resilient: manufacturing activity expanded, and Wednesday’s Q2 2026 GDP final reading, at 2.2% QoQ, up from 1.5%, indicates that the economy is faring better than expected, while the labour market is consistent with “maximum employment.”

Despite this, expectations that the Fed will raise rates in October fell to 30%, while the odds for a hold stand solid near 70%, according to Prime Terminal.

In Australia, the economic docket is absent, but next week’s Flash PMIs and the TD-MI Inflation Gauge will update the status of the economy. In the US, traders are eyeing Friday’s Nonfarm Payrolls report for September, which is expected to dip from 162K to 90K, while the Unemployment Rate is forecast to stand pat at 4.1%.

AUD/USD Price Forecast: Technical Outlook

In the daily chart, AUD/USD trades at 0.6929, extending a bearish near-term bias as spot holds beneath the clustered triple simple moving average (SMA) set at 0.7091. Downside pressure is reinforced by the presence of a broader descending resistance line off 0.8015, while the Relative Strength Index (14) at 25.55 slips into oversold territory, hinting that while sellers remain in control, the pace of the decline could start to moderate rather than accelerate aggressively.

On the topside, initial resistance is located at the triple SMA area around 0.7091, with a stronger barrier at the horizontal line near 0.7198, where prior supply is likely to re-emerge on any corrective bounce. On the downside, price is now probing the lower band of a series of upward-sloping support trend lines originating between 0.6833 and 0.6865, suggesting that the zone just below the current level could offer interim demand, but only a daily close back above 0.7091 would start to weaken the prevailing bearish structure.

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