Aussie Dollar struggles at 0.70, retreats as Oil shock boosts the USD

• AUD/USD loses nearly 0.40% as geopolitical risks trigger safe-haven flows.
• WTI climbs above $93 while Fed's Hammack backs further tightening.
• RBA minutes and Australian business confidence data offer fresh catalysts.

The Australian Dollar ended Monday’s session with losses of close to 0.40% amid thin liquidity due to the Columbus Day holiday, with most US cash markets closed, as market participants were guided by the latest geopolitical developments. The AUD/USD trades near 0.6950 after peaking below 0.7000.

AUD/USD slides toward 0.6950 as geopolitical tensions and hawkish Fed rhetoric weigh

Geopolitics influenced by the Russia-Ukraine conflict and US President Trump announcing an agreement to lift sanctions on Russian diesel exports was cheered by investors, who didn’t expect another social post by Trump, who said that Russia and Ukraine agreed to halt attacks on energy infrastructure.

Despite this, Russia attacked a power plant, and Ukraine’s President Zelenskyy warned of potential retaliation. At the same time, hostilities between the Houthis and Saudi Arabia and Tehran’s launching strikes on vessels sailing through the Strait of Hormuz triggered a flight to safety, which obviously underpinned the US Dollar.

The US Dollar Index (DXY), which tracks the buck’s performance versus six peers, is up 0.33% at 102.56. In the meantime, energy prices drifted higher, with WTI, gaining over 1.60% at $93.17.

In the US, the docket was light, with Cleveland Fed President Beth Hammack reiterating her hawkish stance; she argued that further rate hikes are needed, favoring gradual adjustments, and that she sees the neutral rate of monetary policy near the top of the Federal Open Market Committee (FOMC).

Later in the week, further Fed speakers and the release of US inflation figures are eyed by market participants ahead of the blackout period for FOMC policymakers. Also, Fed Chair Kevin Warsh would cross the wires on October 16 at the International Monetary Fund (IMF).

In Australia, traders are looking for the release of the NAB Business Survey, followed by the Reserve Bank of Australia’s (RBA) meeting minutes, in which Governor Bullock adopted a more neutral stance, acknowledging that raising rates three times may be enough to tame high inflation.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.6957, keeping a bearish near‑term bias as price holds beneath the latest triple simple moving average cluster around 0.7088. The pair also remains capped by the broader downtrend resistance line from 0.8015, while the Relative Strength Index (14) at 36.7 sits in weak territory, hinting that downside pressure persists but is not yet oversold enough to argue for a strong corrective rebound.

On the topside, initial resistance is seen at the grouped simple moving averages near 0.7088, with the descending trend resistance overhead and a more distant horizontal barrier at 0.7198 reinforcing the cap on recovery attempts. On the downside, successive rising trend lines from 0.6897 and 0.6865, alongside the longer‑dated supports from 0.6833 and 0.6673, define a broad demand zone beneath spot, with a clear break below these ascending floors needed to extend the prevailing bearish phase.

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