The AUD/USD pair remains under renewed selling pressure, declining toward the 0.6970 support area during the Asian session after failing to achieve a sustained breakout above the 0.7000 psychological level.
The rejection from higher levels confirms that short-term bullish momentum has weakened, with sellers regaining control after the pair repeatedly failed to clear the 38.2% Fibonacci retracement level at 0.7024. Rubinax’s brokers examine this subject in greater detail in the accompanying article.
The recent recovery from the 200-day Simple Moving Average (SMA) has lost momentum, indicating that buyers are struggling to extend the rebound. Although the pair continues to trade above key long-term technical support, the inability to establish acceptance above 0.7024 suggests that the upside correction from the May-June decline may be approaching exhaustion.
The Australian Dollar has also received limited support from domestic developments, as markets largely ignored comments from the Reserve Bank of Australia (RBA) and shifted focus toward the upcoming Federal Reserve policy decision.
The lack of strong fundamental catalysts has left AUD/USD price action vulnerable to broader movements in the US Dollar index (DXY) and global risk sentiment.
US Dollar Strength and Geopolitical Risk Pressure AUD/USD
The US Dollar maintains a firm bullish bias as investors continue to favor safe-haven assets amid renewed geopolitical uncertainty. The fading optimism surrounding diplomatic developments has increased demand for defensive currencies, providing additional support for the Greenback.
Higher demand for the USD creates downside pressure on AUD/USD, as the pair remains highly sensitive to changes in global risk appetite. The Australian Dollar is traditionally viewed as a risk-sensitive currency, meaning periods of elevated uncertainty can reduce demand for AUD exposure.
However, traders are likely to remain cautious before the conclusion of the two-day FOMC meeting. The central bank’s guidance on interest rates, inflation expectations, and future monetary policy direction could determine the next major move in the US Dollar and influence whether AUD/USD extends its decline or attempts another recovery.
Technical Structure Shows Mixed Momentum Signals
The current AUD/USD technical setup remains mixed, with both bullish and bearish signals visible across indicators. The pair’s repeated rejection near the 38.2% Fibonacci retracement level at 0.7024 highlights strong resistance and suggests that buyers have not generated enough momentum to challenge higher levels.
The Moving Average Convergence Divergence (MACD) indicator continues to show a slightly positive structure. The MACD histogram remains above zero, while the MACD line stays above the signal line, indicating that underlying bullish momentum has not completely disappeared.
However, the momentum picture is weakened by the Relative Strength Index (RSI) remaining close to neutral territory. The neutral RSI reading reflects limited directional conviction, suggesting that neither buyers nor sellers currently have a decisive advantage.
Key AUD/USD Support and Resistance Levels
A decisive bearish continuation would require a break below the 23.6% Fibonacci retracement level, which currently represents the first major downside confirmation zone. A move below this level could accelerate selling pressure and expose the pair toward the 200-day SMA at 0.6904.
The 0.6904 region is a critical technical support area because the 200-day moving average often defines the broader market trend. Holding above this level would preserve the medium-term recovery structure, while a sustained break below it could signal a deeper corrective phase.
Below the 200-day SMA, the next important support zone is located near 0.6868, which acts as a significant Fibonacci-based structural support level. A decline toward this area would indicate that sellers have regained stronger control over the medium-term trend.
On the upside, the immediate resistance remains at 0.7024, corresponding to the 38.2% Fibonacci retracement of the May-June decline. A confirmed breakout above this level would improve the bullish outlook and shift attention toward 0.7073, the 50% Fibonacci retracement level.
Further gains would expose the pair toward 0.7121, aligned with the 61.8% Fibonacci retracement level. A move above 0.7121 would represent a stronger technical breakout and could confirm that the recovery phase has entered a new bullish stage.
AUD/USD Forecast: Breakout Confirmation Remains Crucial
The near-term AUD/USD forecast remains dependent on whether the pair can defend key support levels or overcome major Fibonacci resistance. The rejection from 0.7024 highlights weakening upside momentum, while the decline toward 0.6970 suggests increasing bearish pressure.
From a technical perspective, traders should monitor the reaction around 0.6970, 0.6904, and 0.6868 for signs of continuation or stabilization. A break below these levels would strengthen the bearish scenario, while a recovery above 0.7024 would restore bullish momentum.
Until a clear breakout develops, the AUD/USD pair is likely to remain range-bound, with market participants waiting for confirmation from both Federal Reserve policy signals and evolving global risk conditions.