AUD/USD Trades Soft Below 0.7000 Ahead of RBA Rate Call

Key Moments

RBA Decision Keeps AUD/USD Traders on the Sidelines

The AUD/USD pair is consolidating recent declines in a tight range beneath the 0.7000 psychological threshold, having set a new two-week low during the Asian session on Tuesday. Price action has shifted into a bearish consolidation phase as participants await the upcoming Reserve Bank of Australia (RBA) policy announcement for fresh direction.

The Australian central bank is widely anticipated to lift its policy rate by 25 basis points, which would mark its fifth increase of the year in response to a deteriorating inflation backdrop. Beyond the headline move, traders are expected to scrutinize the accompanying policy statement and RBA Governor Michele Bullock’s remarks at the post-meeting press conference to assess whether the tightening cycle is nearing its peak or if restrictive settings may need to be maintained for longer.

In addition to the RBA outcome, attention is also on the US midterm elections, which could inject volatility and generate short-term trading opportunities in AUD/USD.

Technical Picture: Bias Tilts Lower Despite Mixed Signals

From a chart perspective, the pair maintains a short-term bearish stance after failing to extend gains above the 200-day Simple Moving Average (SMA), located at 0.7058. That rejection has kept spot prices under pressure.

At the same time, the Moving Average Convergence Divergence (MACD) indicator is marginally in positive territory and the Relative Strength Index (RSI) sits near 46, pointing to slightly improving momentum. However, the pair’s position beneath a significant Fibonacci retracement cluster, starting at the 38.2% retracement level of 0.7027, indicates that recovery attempts are likely to be fragile and that the prevailing directional risk remains skewed to the downside.

Key Levels: Support and Resistance Map

Immediate support is seen at the 23.6% Fibonacci retracement level at 0.6977. Below that, a more substantial floor is noted around 0.6896. A decisive break under this latter area would be expected to reassert stronger bearish pressure on the pair.

On the upside, initial resistance is located at the 38.2% Fibonacci retracement at 0.7027. Above there, the 200-day SMA near 0.7058 is followed by the 50.0% retracement at 0.7068. Additional resistance barriers are noted at 0.7108 and 0.7166, before the swing high at 0.7239 potentially comes back into focus.