• AUD/USD dipped on Monday as a stronger US dollar and elevated Treasury yields continued to weigh on the currency pair.
• September US job growth came in weaker than expected last week, while revisions cut payroll gains for the previous two months sharply, reinforcing expectations that the Fed is unlikely to raise rates again this month.
• Persistently above-target US inflation also key reason why markets continue to expect the Fed to maintain a relatively restrictive policy stance. If inflation remains sticky, the central bank could still deliver additional rate increases over the coming months.
• US yields trading close to multi-year highs, the yield advantage remains firmly in favor of the US dollar.
• Meanwhile, investors remained focused on escalating Middle East tensions and the inflationary risks posed by rising oil prices.
• Immediate resistance is located at 0.6985(38.2%fib), any close above will push the pair towards 0.7039(50%fib).
• Support is seen at 0.6919(23.6%fib) and break below could take the pair towards 0.6892(Lower BB ).
Recommendation: Good to buy around 0.6960, with stop loss of 0.7000 and target price of 0.6870
