AUD/USD edges higher to approximately 0.6945 in the early European session on Friday. Fed Chair Warsh indicates that he will not provide insights into potential policy adjustments during the final two meetings of the year. Pricing in financial markets indicated that the likelihood of an RBA rate hike in the November meeting has decreased to below 20%. The AUD/USD pair advances to approximately 0.6945 in the early European trading hours on Friday. The US Dollar attracts some sellers against the Australian Dollar following a speech from Federal Reserve Chair Kevin Warsh. Fed Chair addressed the International Monetary Fund event on Friday, indicating that he will evaluate the circumstances during the policy meetings in October and December. “We removed a dose of accommodation about a month ago,” said Warsh. “I don’t prejudge meetings. I don’t believe in saying now what I might do at the meetings that we have in the balance of this year,” he added.
On the Aussie front, financial markets have reduced the likelihood of an interest rate increase by the Reserve Bank of Australia on November 3 to below 20% after the release of the latest Australian jobs data, a decrease from approximately 35% prior to the data. Unemployment has risen to 4.7%, marking its highest level in almost five years, as the total number of employed Australians decreased by 39,300 jobs in September, according to data released by the Australian Bureau of Statistics earlier this week. Analysts highlight that “today the sun rises with Australian labour data for September,” showing the unemployment rate “printing at 4.7% and a contraction of almost 40 thousand jobs, erasing the job gains seen in July.” Against this softer backdrop, Rabobank notes that “the RBA will also be releasing its annual report later today,” which will be closely watched for any policy signals.
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly below the 6.1/10 established baseline, pointing to a slightly less impactful but still broadly consistent tone. The admission of being “over-scarred from the global financial crisis” underscores a cautious bias even as Warsh highlights structural growth and an investment surge driven by “good policies,” suggesting a preference to wait for “crystalizing” data on output, employment, and inflation at the October and December meetings. Warsh’s focus on AI as a demand-side force and on tail-risk management reinforces a risk-aware stance that tempers any hawkish implications from the investment boom. The FXS Fed Sentiment Index remained stable, registering no change at 127.51, thereby maintaining a distinctly hawkish policy tone, even in light of the marginally lower FXS Speechtracker score. The stable, elevated index level suggests that markets continue to view Warsh’s focus on price stability, investment strength, and forthcoming data-dependent meetings as aligned with a tendency toward tighter policy rather than a move toward a Dollar-dampening dovish stance.
In the daily chart, AUD/USD maintains a bearish near-term outlook as the spot remains below a significant cluster of resistance levels. Price remains beneath the 20-period Bollinger middle band and the 100-day simple moving average, indicating that upward movements are limited as the pair consolidates within the lower half of the recent range. The Relative Strength Index (14) hovers near 39, indicating ongoing downside pressure that, while notable, is not yet at extreme levels following the recent decline. On the topside, initial resistance is positioned at the 20-period Bollinger lower band near 0.6885, succeeded by the Bollinger middle band at 0.6990, where selling interest may resurface. Above that, the 100-day SMA at 0.7040 and the upper Bollinger band near 0.7095 create a broader supply zone that must be surpassed to alleviate the prevailing bearish sentiment and pave the way for a more sustained recovery.
