The Aussie dollar remains in the same consolidation area that we have been in for the year, and it now looks like we are trying to drift to the upside.
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AUD/USD
The Australian dollar has spent most of October trying to recover, and this leads me to think that perhaps we are still stuck in a range, maybe for the foreseeable future. Recently, we have seen the 0.6850 level offer a certain amount of support, while the 0.7250 level has offered resistance, going all the way back to essentially the beginning of the year.
The divergence between the central banks will be front and center, though, because the Australians are starting to see some ugly financial reporting and economic numbers. For example, the latest employment figures were horrific. It ended up being a loss of more than 30,000 jobs when the market was expecting an addition of almost 20,000.
Aussie economy in focus
The market certainly has a lot to absorb when it comes to the Australian economy. In the short term, it looks as if the market is trying to at least hang on to the overall consolidation range. It must be said that, despite the fact that Australia has seen employment get hammered, the U.S. dollar has softened a bit. Maybe that is because traders are starting to pull away from the narrative that the Federal Reserve is going to be aggressively hawkish.
We are now in a scenario where it is possible we have a return to what we had been thinking 6 months ago. As we approach the middle of this range heading into November, this looks like a market that just has not made up its mind. I suspect we still have a scenario where traders are just sorting out what to do next, and in this environment, more of the same is to be expected.
I do think that the Australian dollar probably stays above the 0.6850 level this month, but the occasional dip will almost certainly return. This more likely than not will have more to do with the U.S. dollar itself, and probably peripherally the Australian dollar. Pay attention to what the greenback is doing against multiple other currencies. It could give you a little bit of a heads-up.
It is worth saying that during the entirety of 2026, traders have given the Australian dollar a little bit of grace in comparison to other currencies against the U.S. dollar. But we will have to watch economic numbers coming out of Australia very closely, because if we start to see major problems, then obviously that works against the Aussie dollar.
It is also worth noting that the Australian dollar is considered to be a proxy for China, and China has recently reiterated some positivity. That might be part of what is going on here as well. Watch manufacturing numbers coming out of China. If they start to pick up, that could give Australia a little bit of a boost as well.
My (neutral) take
Quite frankly, by the time I roll around to do my December analysis, I suspect that this market will be closing out November still in the same range we have been in all year. The range will, more likely than not, hold from what I see.
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