FX.co ★ Flokki | AUD/USD

Fundamental Analysis of the AUD/USD AUD/USD closes the week at 0.6945, close to its lowest level since early July, after a run of data that left the Aussie on the defensive. The turning point came on Thursday, when Australia shed 39.3K jobs in September, and the unemployment rate rose from 4.6% to 4.72%, above the RBA's year-end projection of 4.5%. Markets reacted quickly, as the odds of an RBA hike in November fell from about 26% to 15%, and the December odds fell from 62% to 43%. The RBA's own minutes earlier in the week had sounded firm, since the Board considered holding rates but kept another hike firmly in play without any urgency, and the cash rate stands at 4.60%. That hawkish tone has now been undercut by weaker employment and deteriorating business confidence. The US side was just as unhelpful: the dollar touched an April 2025 high after Wednesday's hot US CPI report, and US producer prices then rose 6.3% year on year, well above the 5.3% forecast. The Fed's own path is therefore harder to ease, and traders were also waiting for Fed Chair Warsh's speech at the IMF annual meeting in Thailand on Friday. Over the weekend, watch oil prices, Middle East headlines, and US Treasury yields, since any surprise could create a gap at Monday's open. 1-Hour Chart Analysis On the 1-hour chart, the 0.6945 weekly close follows a volatile Friday and a modest bounce from the multi-month low. Price is sitting above a rising 5 EMA, but the 20 EMA near 0.6955 is flat and capping the recovery, which makes this a typical bounce under resistance rather than a clear reversal. The first test is 0.6955 to 0.6965, followed by 0.6985, where a recent rally stalled, and then the 0.7000 round number. An hourly close above 0.6985 with the 5 EMA moving clearly above the 20 EMA would suggest that short covering has more room and could aim at 0.7000. On the downside, immediate support is 0.6925, then 0.6900, the psychological floor tested this week. A close below 0.6900 would put the pair at fresh lows and open the way to 0.6850. Because the weekly close came after a news-heavy session, Monday's opening gap may set the tone, so wait for the first hour before trading. A practical idea is to sell a rejection candle near the 20 EMA with a stop above 0.6985 and a target at 0.6905, or to buy only after a firm close above 0.6985. Keep position sizes small, since weekend headlines can move the pair quickly.

4-Hour Chart Analysis The 4-hour chart shows a clearly weaker structure than a week ago. Price is under the 20 EMA, which has turned down near 0.6985, and the 5 EMA is beneath it, a bearish alignment that confirms the failure around 0.7000. The pair has formed a sequence of lower highs since the early-October rebound, and this week's drop shows that sellers defended the round number again. Resistance is stacked at 0.6985, 0.7000 and 0.7050, with 0.7050 being the top of the corrective channel that traders have been watching. For the bearish bias to weaken, the pair needs a 4-hour close above the 20 EMA and ideally above 0.7000. Support begins at 0.6900, the level that has held on the recent test, followed by 0.6850 and 0.6800. A 4-hour close beneath 0.6900 would confirm a new leg lower and may attract momentum sellers. Swing traders may prefer to sell rallies into the falling 20 EMA near 0.6985 with a stop above 0.7015, aiming for 0.6900, instead of selling directly into support. The market is also near an oversold zone, so a short-lived bounce is possible before any breakdown, which is why partial profit-taking near 0.6900 makes sense.