The US dollar is rising slightly in the early part of the Wednesday session.
AUD/USD Price Forecast: Consolidates above 0.7050; 100-day SMA holds the key ahead of Fed
The AUD/USD recovery is nearing downtrend resistance– a level that could determine whether buyers regain control. All eyes on.
Sr. Technical Strategist Michael Boutros highlights the levels that matter on the USD Majors, commodities, and equity indices.
The Australian dollar dipped its toe into the upper 60s last week, although for now it is not ready to commit to a break below 70c. And while it mostly finished lower against its major peers, its performance was mixed and not akin to a currency in freefall.
Australian dollar remains at the front foot and continues to pressure strong barriers at 0.7050 zone (daily cloud base / Fibo 23.6% of 0.7277/0.6978) for the second consecutive day, but attempts to extend Thursday's almost 1% advance, remain so far capped.
AUD/USD remains under pressure after a sharp reversal from the yearly highs, with the decline now approaching a major support confluence that could prove pivotal for the broader trend. The selloff has driven momentum to its weakest levels in months and brings the multi-month uptrend into focus as price nears a critical technical threshold.
The US dollar has been on the move again, as headlines continue to complicate things in general.
Looking at the 4-hour chart, the pair settled below the 0.7050 pivot level, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair even spiked below 0.7000.
The Australian dollar has slipped below the key 70c level as persistent US inflation supports the US dollar and dampens hopes for Fed rate cuts. With implied volatility turning higher, risk reversals signalling greater demand for downside protection, and yield spreads favouring the greenback, AUD/USD bears are increasingly setting their sights on the 69c handle.
AUD/USD is testing a critical Fibonacci confluence at the 70-cent handle after a 3.8% decline from its yearly high, with US CPI, FOMC and RBA decisions all due within days. Michael Boutros, Senior Market Analyst at FOREX.com, maps the multi-timeframe breakdown and explains what a sustained close below 70 could trigger for AUD/USD.
Global markets have struggled to regain their footing after last week's selloff. Attempts to revive the AI trade have faded quickly, while concerns over persistent inflation and renewed US-Iran tensions continue to weigh on sentiment.