Key Moments
- AUD/USD trades near 0.7100, down 0.15%, pressured by a stronger US Dollar and hawkish Federal Reserve commentary.
- The US Dollar Index climbs 0.17% to around 100.73 in early European hours, marking its highest level in more than seven weeks.
- Australia’s S&P Global flash Composite PMI falls to 50.8 in September from 52.7 in August, weighed by weaker manufacturing and slower services activity.
Dollar Strength Drives AUD/USD Lower
The Australian Dollar is trading weaker against the US Dollar in early European dealings on Wednesday, with AUD/USD down 0.15% and hovering around the 0.7100 level. The pair is under pressure as the US Dollar extends its advance, supported by firm expectations for tighter US monetary policy and ongoing concerns about stubborn inflation.
The US Dollar’s advance is being reinforced by recent remarks from Federal Reserve officials emphasizing persistent inflation risks amid energy-related shocks, solid consumer spending, and investment linked to artificial intelligence.
US Dollar Outperforms in FX Markets
In early European trade, the US Dollar Index (DXY) – a measure of the Greenback against six major currencies – is up 0.17% near 100.73, its highest level in over seven weeks. The US Dollar is showing broad-based strength, with today’s moves leaving it particularly strong against the New Zealand Dollar.
The overview below summarizes the described performance of the US Dollar against major counterparts:
| Base Currency | Quote Currencies | Commentary |
|---|---|---|
| USD | Major FX (including NZD) | US Dollar was the strongest against the New Zealand Dollar. |
The accompanying heat map referenced indicates percentage changes across major currency pairs, with the base currency listed in the left column and the quote currency in the top row. For example, choosing the US Dollar as the base and the Japanese Yen along the top row shows the percentage change in USD/JPY.
Australian Data Softens as PMI Eases
Against most major currencies, the Australian Dollar is trading higher, with the exception of its performance against North American currencies. Domestic data, however, has been less supportive.
Earlier in the session, Australia’s S&P Global flash Composite Purchasing Managers’ Index for September came in weaker than anticipated, printing at 50.8 versus 52.7 in August. The moderation was attributed to a drop in manufacturing output and a slowdown in services sector activity, signaling softer momentum in overall private-sector conditions.
AUD/USD Technical Picture: 20-Day EMA Caps Upside
On the daily chart, AUD/USD is changing hands around 0.7104, holding marginally above the 38.2% Fibonacci retracement at 0.7097. Despite this nearby support, the pair remains constrained by the 20-period exponential moving average at 0.7135, which continues to act as a key ceiling for prices.
| Level Type | Price | Commentary |
|---|---|---|
| Spot AUD/USD | 0.7104 | Trading just above key Fib support. |
| 20-period EMA | 0.7135 | Immediate resistance, capping recovery attempts. |
| 38.2% Fibonacci | 0.7097 | First notable support area. |
| 50.0% Fibonacci | 0.7053 | Part of a denser support zone below market. |
| 61.8% Fibonacci | 0.7009 | Additional support within the same cluster. |
| 78.6% Fibonacci | 0.6947 | Deeper downside target if selling extends. |
| 100% Fibonacci | 0.6867 | Full retracement level on the downside. |
| 23.6% Fibonacci | 0.7151 | Secondary resistance above the 20-period EMA. |
| 0.0% Fibonacci (cycle high) | 0.7238 | Key upside reference and more substantial barrier. |
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