AUD/USD breaks 0.6950 as NASDAQ rout threatens key 0.6900 support

The Australian Dollar experienced a significant drop, falling over 1% on Thursday, as risk appetite diminished and US tech stocks faced heavy selling. Strong US job data bolstered the US Dollar ahead of the much-anticipated Nonfarm Payrolls report for the following Friday. Throughout the day, the AUD/USD currency pair traded at 0.6931, reaching a peak of 0.7024 earlier.

Risk aversion prevailed in the market, as US equities plummeted by more than 5.52% in a single day, entering a correction phase. Concerns over potential AI regulation in the US Congress, coupled with a possible slowdown in data centers, contributed to the negative sentiment. The latest US jobs data revealed a fall in Initial Jobless Claims to 189K, well below the forecasted 196K.

Challenger Job Cuts for October increased by 2% to 43,994K. Despite this, companies anticipate hiring over 444,692 workers in October, representing a 57% increase compared to 2025 figures. Fed officials' hawkish remarks provided a lifeline to the US Dollar, with Cleveland Fed's Beth Hammack suggesting a gradual rate increase approach and Richmond Fed's Thomas Barkin emphasizing persistent high inflation.

The AUD/USD currency pair decisively broke the 0.7000 level, intensifying its decline below the 0.6950 support. The pair remains in the 0.6900-0.7030 range, signaling a possible bearish trend. Traders are adjusting their expectations, with the probability of a 25-basis-point rate hike at the Federal Reserve's December meeting falling to 66%, down from 82% the previous day.

In Australia, the absence of Reserve Bank of Australia (RBA) announcements on Friday allowed investors to price out further rate hikes, leading to the expectation that the RBA will maintain rates until the June 22, 2027 monetary policy meeting, as reported by Prime Terminal. As the US schedule unfolds, the focus will be on the October Nonfarm Payrolls report, the Unemployment Rate, and the University of Michigan Consumer Sentiment Index.

On the daily chart, AUD/USD stands at 0.6928 with a bearish near-term bias, as the price trades below clustered simple moving averages (SMA) and a series of rising trend-line projections acting as overhead resistance between 0.7120 and 0.7470. The 14-period Relative Strength Index suggests weak but stabilizing downside momentum.

Potential resistance lies at the triple SMA zone around 0.7050, followed by a rising trend line near 0.7123 and a significant horizontal barrier at 0.7198. Conversely, immediate support is defined by a shorter-term ascending trend line around 0.6923, with a deeper structural floor near the prior downtrend reference at 0.6347 if selling intensifies.