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AUD/USD struggles as the US Dollar soars to a nine-month high, eyes on RBA conference

  • AUD/USD trades at 0.6423, experiencing a 0.25% drop on Monday, as the US Dollar Index (DXY) reaches a ten-month high at 106.09, driven by elevated US bond yields.
  • US Treasury bond yields touch multi-year highs, with the 10-year T-bond rate hitting 4.533%, reflecting the US Federal Reserve’s 'higher for longer' stance on interest rates.
  • Federal Reserve officials, advocate for a cautious and patient approach to monetary policy, not ruling out the possibility of another rate hike, while Australian traders await key economic releases.

The Australian Dollar (AUD) lost some ground against the US Dollar (USD) as the latter strengthened the most in nine months, underpinned by elevated US bond yields. Hence, the AUD/USD is trading at 0.6423, printing minuscule gains as the Asian session begins, but on Monday, it dropped 0.25%.

AUD/USD faces pressure as the buck’s climbs to multi-month rise

Wall Street finished Monday’s session with gains led by the Nasdaq and followed by the S&P 500. The Greenback remains in the driver’s seat as investors brace for the US Federal Reserve’s mantra “higher for longer,” as US Treasury bond yields touch multi-year highs. The US 10-year T-bond rate hit 4.533% during the session, while the US Dollar Index (DXY) rose to a ten-month high at 106.09.

Data-wise, the Chicago Fed National Activity Index plunged to -0.16 in August from 0.07 in July, while the Dallas Fed Manufacturing Index plummeted to -18.1 in September from -17.2 the prior month.

Federal Reserve speakers in the central bank adopted a cautious stance, mainly Boston and San Francisco Fed Presidents Susan Collins and Mary Daly. Both stressed the Fed should be patient on monetary policy but haven’t ruled out another rate hike. Recently, the Chicago Fed President Austan Goolsbee said that a soft landing is possible, but inflation risks remain tilted to the upside.

Meanwhile, AUD/USD traders would take cues from the Australian economic docket with the release of the Reserve Bank of Australia (RBA) Conference in inflation. On the US front, the docket would release the S&P/Case-Shiller Home Prices, alongside housing data and the CB Consumer Confidence.

AUD/USD Price Analysis: Technical outlook

The Aussie’s daily chart portrays the currency pair as neutral to downward biased. Currently is consolidated at around the 0.6400 mark, but a bearish-harami candlestick chart pattern could pave the way for further losses. The first support is seen at the current exchange rate, at around two and a half years of support trendline. A breach of the latter would open the door to test the September 4 low of 0.6357, followed by the November 22 swing low of 0.6272. Conversely, if the pair climbs past the 0.6500 figure, the next resistance is at the 50-day moving average (DMA) at 0.6671.

AUD/USD

Overview
Today last price0.6424
Today Daily Change-0.0017
Today Daily Change %-0.26
Today daily open0.6441
 
Trends
Daily SMA200.6432
Daily SMA500.6523
Daily SMA1000.6605
Daily SMA2000.6697
 
Levels
Previous Daily High0.6465
Previous Daily Low0.6404
Previous Weekly High0.6511
Previous Weekly Low0.6385
Previous Monthly High0.6724
Previous Monthly Low0.6364
Daily Fibonacci 38.2%0.6442
Daily Fibonacci 61.8%0.6427
Daily Pivot Point S10.6408
Daily Pivot Point S20.6375
Daily Pivot Point S30.6347
Daily Pivot Point R10.647
Daily Pivot Point R20.6498
Daily Pivot Point R30.6531

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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