Australian Dollar drifts toward 0.69 as USD shrugs off Fed patience

The Australian Dollar has been slipping, falling 0.26% against the US Dollar, as the latter continues its fourth consecutive day of gains. This decline comes as the Federal Reserve's policymakers are suggesting that patience is warranted before the October 28 meeting. The AUD/USD is currently trading at 0.6928. Despite some positive sentiment during the day, it was marred by harsh comments from US President Donald Trump, who reiterated that Iran will not have a nuclear weapon and expected to resume bombing Iran in November.

Fed officials, including Vice Chairman Philip Jefferson, pointed out that the economy is nearing maximum employment and emphasized patience on rate changes. Meanwhile, Minneapolis Fed President Neel Kashkari advocated for additional rate hikes. Economic data released in the US, such as the ISM Manufacturing PMI, showed little change at 54.5, below forecasts, while other indicators, like New Orders and Prices Paid, were positive.

The jobless claims for the week ending September 26 were 197K, lower than estimates and the previous week's revised figure of 198K. This resilience in the economy, with manufacturing activity expanding and Q2 2026 GDP final reading at 2.2% QoQ, despite softer inflation, has led to a decrease in expectations that the Fed will raise rates in October, falling to 30%, while the odds for a hold remain solid at 70%.

In Australia, the economic docket is empty, but next week's Flash PMIs and the TD-MI Inflation Gauge will provide updates. In the US, traders are watching the September Nonfarm Payrolls report for September, expected to drop from 162K to 90K, with the Unemployment Rate expected to remain unchanged at 4.1%. On the daily chart, AUD/USD is at 0.6929, with a bearish near-term bias as it remains below the clustered triple simple moving average (SMA) of 0.7091.

The presence of a broader descending resistance line at 0.8015 and a relative strength index (14) of 25.55 in oversold territory suggests that while sellers dominate, the decline may not accelerate aggressively. The triple SMA area at 0.7091 represents initial resistance, with a stronger barrier at the horizontal line near 0.7198, where prior supply could re-emerge on any corrective bounce.

Downside support is now probing the lower band of several upward-sloping support trend lines originating between 0.6833 and 0.6865, which could offer interim demand, but only a daily close above 0.7091 would weaken the prevailing bearish structure.