AUD/USD Price Forecast: Strengthen to near 0.6950, but keeping bearish bias amid oversold conditions

The AUD/USD pair gained strength to around 0.6940 during early European trading hours on Friday, but traders are bracing for potential caution later in the day due to key US economic data and tensions in the Middle East. Market focus will be on the US employment data for September, with economists anticipating a slowdown in job growth and the unemployment rate staying steady at 4.1% for a third straight month.

A stronger-than-expected report could prompt the Federal Reserve to increase interest rates, bolstering the US dollar. Currently, there is a 74% chance of the Fed maintaining rates in October, up from 36% a week ago, according to the CME FedWatch tool. However, the Reserve Bank of Australia's probability of raising rates in November has plummeted, with markets now expecting rates to remain unchanged.

Analysts believe further rate hikes by the RBA could be excessive, as inflation remains high, and it takes time for rate adjustments to impact sectors like real estate. The AUD is unlikely to receive further assistance from the RBA. Fed Chair Jerome Powell's speech indicated a more hawkish stance, suggesting further tightening to achieve a 2% inflation target, which aligns with a bullish dollar outlook.

AUD/USD is currently trading below the 100-day moving average and the Bollinger middle band, signalling a bearish near-term outlook. Immediate support is near 0.6905, while resistance lies at 0.7060 and 0.7085.