The hard barrier is around 0.6950

• AUD/USD resumed its weekly downtrend and broke below 0.6900.
• The greenback kept its bullish performance unchanged.
• Activity in Australia’s services sector remained healthy in September.

AUD/USD saw its selling trend gain further momentum on Thursday. That said, the pair broke below the key support of 0.6900 to hit new multi-day lows near 0.6830.

The Australian dollar’s renewed downtrend mirrored the performance of its risk-on peers, all against the backdrop of a strong rally in the US dollar (DXY), which remained supported by the auspicious results of data releases as well as geopolitical effervescence in the Middle East.

Cooperating with the sour sentiment around the commodity complex, copper prices resumed their weekly slide, while iron ore prices traded with modest losses, albeit holding the upper limit of the recent range. In addition, recently announced stimulus measures in China, particularly related to the housing sector, should help iron ore prices maintain their upward trend.

On the monetary front, the Reserve Bank of Australia (RBA) kept rates unchanged at 4.35% during the September 24 meeting, as expected. While the RBA acknowledged inflation risks, Governor Michele Bullock signaled that a rate hike was not being seriously considered.

Markets currently anticipate a 55% chance of a 25 basis point interest rate cut by the end of the year.

In fact, the RBA is expected to be among the last G10 central banks to cut interest rates, possibly cutting later this year to counter weak economic activity and cooling inflationary pressures.

While the Federal Reserve’s interest rate cuts are already being factored in, AUD/USD could post further gains in 2024, although concerns about China’s economic outlook and stimulus measures remain.

On the domestic calendar, the final Judo Bank Services PMI remained in expansionary territory at 50.5 in September. It is worth noting that the index has been above 50 since March 2022.

AUD/USD Daily Chart

AUD/USD Short-Term Technical Outlook

Further losses could see AUD/USD lower to the intermediate 55-day and 100-day SMAs at 0.6699 and 0.6685 respectively, ahead of the September low of 0.6622 (September 11), which it is supported by the key 200-day SMA (0.6626). ).

On the other hand, the initial barrier comes at the 2024 high of 0.6942 (September 30) ahead of the key hurdle of 0.7000.

The four-hour chart suggests some bearish resurgence. Having said that, initial support is 0.6915 before 0.6942 and then 0.7024. On the downside, initial support is 0.6829, followed by 0.6817. RSI has dropped to near 40.