Australian Dollar sinks further below 0.6850 to lowest since January as USD remains bullish

• Selling pressure on AUD/USD continues for a third consecutive day as the USD builds on its post-US CPI gains.
• The USD reaches its highest level since April 2025, supported by growing Fed rate hike expectations and geopolitical risks.
• Further downside for the Aussie remains in focus as the RBA’s dovish stance adds to pressure on the currency.

Bearish pressure keeps AUD/USD vulnerable around 0.6830, with spot prices down 0.25% on the day amid several adverse factors. During Thursday’s early European session, the pair touched its lowest level since January as losses continued for a third consecutive day. The decline also marks the fifth negative session in the past five.

Pressure on AUD/USD has intensified as the US Dollar (USD) advances for a third consecutive day, with markets increasingly accepting that the US Federal Reserve (Fed) will raise borrowing costs again in December. Meanwhile, the Australian Dollar (AUD) has lagged since the Reserve Bank of Australia’s (RBA) dovish rate hike earlier this November. That decision featured a 6-3 vote split and dropped explicit guidance on further tightening.

Tuesday’s release of stronger-than-expected US consumer inflation figures for October, together with hawkish remarks from several Fed officials, reinforced those expectations. Traders have also begun factoring in the possibility of a larger 50-basis-point (bps) increase next month. Alongside geopolitical risks arising from the US-Iran confrontation over the Strait of Hormuz, these expectations support demand for the safe-haven Greenback and reinforce the near-term bearish outlook for AUD/USD.

Hopes of a diplomatic solution to the continuing conflict have weakened further after Iran's Armed Forces Deputy Chief of Staff Brigadier General Kioumars Heidari said Tehran had shut the strategic waterway and would reopen it only on the orders of the leader of the revolution. US forces reportedly launched a series of strikes against Iran's Qeshm Island, while Tehran targeted ship navigation systems on the Omani island of Didamar at the entrance to the Persian Gulf.

The fundamental backdrop still appears firmly supportive of AUD/USD bears, leaving any recovery attempt exposed to fresh selling and a potentially swift loss of momentum. For the next catalyst, traders are awaiting US Weekly Initial Jobless Claims data. That release, comments from Fed officials and further developments in the Middle East crisis could influence the US dollar and give the pair fresh direction.

What does the AUD/USD daily chart show?

Can AUD/USD Reclaim Key Resistance?

A recent failure to establish a foothold above the 100-day Simple Moving Average (SMA) at 0.7026, followed by a break below 0.6900, keeps the near-term technical bias for AUD/USD bearish. A move back above 0.6900, now the first significant resistance level, would be needed to soften the immediate negative tone and open the way for a retest of the 100-day SMA at 0.7026.

(The technical analysis of this story was written with the help of an AI tool. Know more.)