AUD/USD Holds Above 0.7050 Ahead of Fed Decision

Key Moments

Consolidation Ahead of FOMC Decision

The AUD/USD pair is under mild downward pressure for a second consecutive session, yet selling interest remains limited as the exchange rate stays above the 0.7050 mark through the Asian session on Wednesday. Market action reflects mixed signals, with neither bulls nor bears able to establish a clear short-term trend.

On the policy front, the Reserve Bank of Australia (RBA) delivered a hawkish hold on Tuesday, signaling that additional rate hikes remain possible if inflation does not ease. This stance is lending underlying support to the Australian Dollar (AUD). At the same time, an interim US-Iran peace agreement is weighing on demand for the safe-haven US Dollar (USD), offering another layer of backing for AUD/USD.

Despite these supportive factors, participants are reluctant to take strong positions before the upcoming FOMC policy announcement, keeping trading conditions cautious and range-bound.

Technical Picture: 100-day SMA as Pivotal Barrier

From a technical standpoint, AUD/USD retains a bearish bias in the near term while it trades below a key resistance cluster at 0.7085-0.7090. This zone combines the 100-day Simple Moving Average (SMA) with the 38.2% Fibonacci retracement of the May-June decline, forming a critical inflection point for the pair.

Momentum studies continue to point to downside risks. The Relative Strength Index (RSI) is hovering near 43, while the Moving Average Convergence Divergence (MACD) line is below both the zero line and the signal line. The MACD histogram also remains slightly negative, reinforcing the view that the short-term downtrend is still intact.

Key Technical Levels

Immediate resistance sits at the 0.7085-0.7090 confluence area. Beyond this initial barrier, additional resistance levels are located at the 50% Fibonacci retracement at 0.7124 and the 61.8% retracement at 0.7159. A decisive move above these thresholds would be required to alleviate the prevailing bearish pressure and could open the door toward the 78.6% retracement at 0.7209 and the recent swing high near 0.7272.

On the downside, first support is aligned with the 23.6% Fibonacci retracement at 0.7046. Below that, the focus would shift to the monthly low around 0.6976. A break beneath this latter level would be seen as reinforcing the broader downward trajectory for the pair.