AUD/USD Price Forecast: Bears Target $0.64 as US-China Tensions Hit Australian Dollar
During the early European trading session, the AUD/USD pair extended its losses for the second consecutive session, trading lower around...
Quick overview
- The AUD/USD pair has extended its losses, trading around the 0.6470 level due to rising US-China trade tensions and weak Australian jobs data.
- Disappointing employment figures have increased speculation for a rate cut by the Reserve Bank of Australia, with the probability rising sharply to 85%.
- Despite a decline in the US dollar, concerns over global growth and weak inflation data from China continue to pressure the Australian Dollar.
- Technical analysis indicates that the AUD/USD remains under bearish control, with potential further declines if it closes below key support levels.
During the early European trading session, the AUD/USD pair extended its losses for the second consecutive session, trading lower around the 0.6470 level. However, the reason for its downward trend can be linked to the rising US-China trade tensions, weak Australian jobs data, and speculation over central bank rate cuts.
Although, the decline in the US dollar helped limit AUD/USD’s losses, preventing the pair from falling further. Investors considered both local and global risks, which put pressure on the Australian Dollar, but the weaker US Dollar helped prevent it from falling too much.
US-China Trade Tensions Weigh on the Aussie
On the US-China front, the Australian Dollar came under pressure as rising trade tensions raised concerns about global growth. US officials, including Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent, criticized China’s plans to limit rare earth exports, calling them “economic coercion” and a threat to global supply chains.
However, both officials also said that negotiations might still be possible, creating uncertainty about the impact. Since Australia trades closely with China, any slowdown in Chinese demand could directly affect the Australian Dollar.
Weak Australian Jobs Data Fuels Rate Cut Speculation
Besides this, disappointing employment figures added to the Aussie’s struggles. The Australian Bureau of Statistics reported a mere 14.9K increase in jobs for September, missing expectations of 17K. Moreover, the unemployment rate jumped to 4.5%, the highest in nearly four years.
Consequently, the probability of a November rate cut by the Reserve Bank of Australia (RBA) rose sharply, increasing from 50% to 85% in just a few days. RBA officials said they will make careful decisions based on economic data, particularly given the ongoing uncertainty in global economic conditions.
US Dollar Supported Amid Government Shutdown and Fed Rate-Cut Optimism
On the other hand, the US dollar started to lose traction despite earlier support. The US government shutdown entered its third week after the Senate again failed to pass funding bills, marking the tenth unsuccessful attempt. This ongoing political deadlock added uncertainty and weighed on the Dollar, reducing its appeal compared to recent safe-haven demand.
At the same time, markets are still expecting possible rate cuts by the Federal Reserve, with nearly a 97% chance in October and an 83% chance in December. Fed Chair Jerome Powell and other officials have suggested that lower interest rates may be needed to support growth due to slow hiring and broader economic uncertainties.
These expectations have reduced the Dollar’s appeal, allowing AUD/USD to limit its losses.
Global Economic Signals Add Pressure
In addition to these factors, weak inflation data from China added to concerns about global growth. China’s Consumer Price Index fell 0.3% in September, below expectations, and the Producer Price Index dropped 2.3%, showing continued weakness in manufacturing.
This has made investors cautious, which also affects risk-sensitive currencies like the Australian Dollar.
Looking ahead, AUD/USD is likely to stay under pressure as traders watch US-China trade talks, Australian jobs data, and policy signals from the Fed and RBA.
AUD/USD Technical Analysis: Bears Eye $0.64 Breakdown
The AUD/USD pair remains under selling pressure, trading around $0.6479 after repeated failures to reclaim resistance near $0.6520–$0.6540. Price action stays capped beneath a descending trendline, with both the 20-day and 50-day EMAs sloping downward — a clear sign of sustained bearish control.
Recent small-bodied candles signal consolidation within a broader downtrend, while the RSI at 39 shows weak momentum and no signs of bullish divergence. A daily close below $0.6445 could trigger another leg lower toward $0.6415 and $0.6372, both key support zones from August.
Trade Setup:
Short positions below $0.6470 remain favored, targeting $0.6415 and $0.6370, with stops above $0.6525. Conservative traders may wait for a confirmed break below $0.6440 for clearer entry. Unless bulls push above $0.6540, the Aussie dollar outlook remains bearish, with downside momentum likely to persist in the near term.
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