AUD/USD Price Forecast: Rising oil prices push antipodeans under pressure

The Australian Dollar underperforms its major currency peers, except the New Zealand Dollar (NZD), on Thursday. Against the US Dollar (USD), the antipodean is down 0.4% to near the psychological level of 0.7000.

Risk-perceived currencies have come under pressure due to surging oil prices amid fears of fresh escalation in Middle East tensions. As of writing, the WTI Oil price is up 1.5% to near $99.00.

Analysts at Commerzbank report that Middle East tensions “intensified after a drone attack on Saudi Arabia's Shaybah oil field killed two people and injured two others,” but note that the impact on crude was ultimately contained. They highlight that “oil prices briefly jumped on reports suggesting a wider withdrawal of US diplomatic personnel from the Gulf,” before the move faded as “Washington clarified that the order was limited to Saudi Arabia,” prompting the market to pare earlier gains.

Meanwhile, the recovery move in the US Dollar Index (DXY) has also build pressure on the Aussie pair. In European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, bounces back to near 101.66 after revisiting the three-week low near 101.45.

The next trigger for the Australian Dollar and the US Dollar is expected to be the Australia-United States (US) flash private sector PMI data for October, which is scheduled for Friday.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades at 0.6996. The pair sits exactly at the 20-day exponential moving average (EMA) near 0.6996, turning it into a pivotal level and keeping the short-term bias neutral while price oscillates around this dynamic line.

The Relative Strength Index (RSI) hovers just below the 50 mark at 48, hinting at a lack of clear directional momentum as recent downside pressure has slowed but buyers have yet to regain firm control.

With price pinned to the 20-day EMA and the delivery of a breakout of the Double Bottom formation, a sustained close above this pivot would open the door for the bulls to regain the upper hand and attempt a recovery toward prior highs around 0.7036. On the downside, the Aussie pair could enter a fresh leg of decline if it declines below the October 15 low at 0.6894.