Australian Dollar climbs as Fed’s Williams push the brakes on rates

The Aussie Dollar registers a gain of over 0.34% against the US Dollar on Tuesday as news flows remain quiet, with US data coming mixed, while hostilities in the Middle East continue. The AUD/USD trades at 0.6983.

AUD/USD advances as Fed policy divergence and RBA tightening risks shift market sentiment

US equity markets closed mixed on Tuesday, while the Greenback was on the back foot, being the laggard amongst FX currencies. Dovish comments by New York Fed President John Williams weighed on the Dollar, which retreated after hitting 18-month highs.

Williams said that he has pencilled one rate increase in 2026 but none for the next year. Meanwhile, Regional Fed Bank Presidents Susan Collins and Austan Goolsbee expressed that the labor market is solid and that the AI buildout is driving inflation higher, meaning that further tightening is needed.

US data was mixed, with Existing Home Sales rising 1.5% MoM to 3.99 million in September, exceeding August’s contraction. Jobs data from Automatic Data Processing (ADP) showed that the 4-week average Employment Change cooled from 25.25K to 24.75K.

In Australia, the economic docket remains absent, though the latest Reserve Bank of Australia meeting minutes showed that the high cost of living and further price increases open the door for rate rises.

Ahead, the Aussie economic schedule will feature jobs data on October 15. The economy is expected to add 20K people to the workforce, down from 39.5K in August, and the Unemployment Rate is projected to stay unchanged at 4.6%.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.6983, extending a corrective phase below the clustered simple moving averages (SMA) around 0.7087, which keeps the near-term bias bearish. Price holds above the upward support trend line coming off 0.6833, now mapped near 0.6914, while the Relative Strength Index (14) at about 41 suggests soft, but not extreme, downside momentum after the recent retreat from the 0.72 area.

On the topside, initial resistance is seen at the rising trend-line barrier near 0.7077, followed closely by the 50/100/200-day SMA cluster around 0.7087, with a stronger cap at the horizontal level of 0.7198; further up, broader trend resistance waits near 0.7426 and then 0.8866/0.9790. On the downside, immediate support is offered by the trend line around 0.6914, ahead of the prior downward resistance line turned structural floor near 0.6362, where buyers would be expected to defend the broader base if selling pressure deepens.