Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6754.
Add a stop-loss at 0.6900.
Timeline: 1-2 days.
Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6900.
Add a stop-loss at 0.6754.
The AUD/USD pair extended its downtrend, falling to its lowest level since March 31 and 5.45% below its September high. The sell-off could continue as the US dollar, crude oil prices, and bond yields have jumped. It was trading at 0.6852, well below its year-to-date high of 0.7276.
Australian Dollar Sell-Off Continues
The AUD/USD pair has slipped sharply this week, continuing the sell-off that started in September when it peaked at 0.7276. It has dropped because of the strength of the US dollar, which has jumped to the highest level since April 2025.
The dollar continued rising after the US released strong jobs and inflation report. A report released by the Bureau of Labor Statistics showed that the US economy created over 165k jobs last month. Another report revealed that the country’s consumer inflation remained at an elevated level last month.
These numbers have led to a surge in US bond yields, pushing investors to predict that the Federal Reserve will hike interest rates in the next meeting. Indeed, some Federal Reserve officials have started making the case for higher interest rates.
US inflation has jumped because of President Donald Trump’s tariffs and his war with Iran. Indeed, while the war has thawed, there are signs that Iran will continue shooting ships attempting to cross the Strait of Hormuz.
US bond yields rebounded, with the ten-year crossing the 5% milestone on Wednesday. Similarly, Australia bond yields have started rising, with the ten-year hitting 5.05%, up modestly from this month’s low of 4.96%. Economists expect the Reserve Bank of Australia (RBA) will hike interest rates in the December meeting.
AUD/USD Technical Analysis
The AUD/USD pair has been in a strong sell-off in the past few days. It has dropped to a low of 0.6850, its lowest level since March. The pair has dropped below the important support level of 0.6892, the lowest swing on October 15.
It has dropped below the 23.6% Fibonacci Retracement level. Also, the pair has dropped below the 50-day moving average. It has also moved below the Supertrend indicator and formed a head-and-shoulders pattern.
Therefore, the pair will likely continue falling, potentially to the 38.2% Fibonacci Retracement level of 0.6754. On the other hand, a move above the resistance level of 0.6892 will invalidate the bearish outlook.
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