AUD/USD Pressured as Stronger Dollar Tests Support

Key Moments

AUD/USD trades near 0.6935 in Asian hours, down 0.15% as the US Dollar outperforms.
The US Dollar Index (DXY) is up 0.5% around 102.50, its highest level in more than 17 months.
AUD/USD maintains a bearish bias below the 20-day EMA at 0.7040, with support eyed at 0.6900 and 0.6866.

US Dollar Strengthens on French Fiscal Concerns

The Australian Dollar is weaker against the US Dollar in Asian trading on Monday, with AUD/USD slipping 0.15% to trade close to 0.6935. The pair is facing renewed selling interest as the US Dollar gains ground amid rising worries about France’s fiscal outlook.

At the time of writing, the US Dollar Index (DXY) – a benchmark that tracks the Greenback against six major peers – is up 0.5% and trading near 102.50. This marks the highest level in over 17 months, underscoring the recent improvement in safe-haven demand for the US currency.

Intraday US Dollar Performance

The article notes that the US Dollar has been the strongest against the Euro in today’s session. A heat map of major currencies shows percentage changes between pairs, where the base currency is selected from the left column and the quote currency from the top row. For example, choosing the US Dollar from the left and moving horizontally to the Japanese Yen cell displays the percentage change for USD (base)/JPY (quote).

French Budget Doubts Lift Safe-Haven Demand

Market participants have become more cautious about French fiscal policy as investors question whether the country’s 2027 budget proposal, presented last week by Finance Minister Roland Lescure, will secure approval in Parliament.

Brown Brothers Harriman’s Elias Haddad points to growing fiscal headwinds in France, warning that they “doubt the proposal will clear parliament without significant concessions,” and highlighting the political challenges to substantial consolidation. Haddad also contends that “a rollover of the 2026 budget is the most likely outcome given the limited appetite for compromise before the presidential election on April 18, 2027.”

These heightened concerns over France’s fiscal trajectory have supported the appeal of the US Dollar as a safe-haven asset.

Federal Reserve Expectations Ease After US Jobs Data

On the policy front, traders have scaled back expectations for further Federal Reserve tightening at the October meeting. This shift follows the latest United States Nonfarm Payrolls data for September, which indicated moderate employment growth. As a result, the market’s hawkish Fed bets have been reduced, even as the Dollar remains supported by risk sentiment linked to fiscal worries in Europe.

AUD/USD Technical Outlook: Bias Stays Bearish Below 0.7040

From a technical perspective, AUD/USD is trading around 0.6939 on the daily chart and continues to exhibit a bearish near-term structure. The pair is holding below the 20-day Exponential Moving Average (EMA) at 0.7040, which keeps downside pressure in place as long as price remains under this dynamic resistance.

The Relative Strength Index (14) stands near 28, signaling oversold conditions. This reading suggests that while the pair is stretched on the downside, any immediate weakening in bearish momentum may be more about consolidation than a clear reversal signal.

Level	Price	Comment
Resistance 2	0.7040	20-day EMA, key level to ease bearish bias
Resistance 1	0.7000	Psychological barrier before the 20-day EMA
Support 1	0.6900	Immediate support; loss could open further downside
Support 2	0.6866	Next downside target if 0.6900 fails

On the upside, the initial resistance lies at the 20-day EMA at 0.7040, which currently caps recovery attempts and marks the threshold that buyers would need to reclaim to alleviate the prevailing bearish tone. Before that, the round figure at 0.7000 is expected to act as an important psychological obstacle.

On the downside, immediate support is seen at 0.6900. A clear break below this level could open the door for a continuation of the decline toward 0.6866.