AUD/USD Price Forecast: Trades near two-week low below 0.7000 as RBA decision approaches

• After reaching a two-week low in Asian trading, AUD/USD is consolidating its recent decline.
• With the RBA decision approaching, traders appear reluctant to take fresh directional positions.
• Conflicting technical signals also call for caution over positioning for additional declines.

Below the psychological 0.7000 level, AUD/USD has moved into bearish consolidation after setting a fresh two-week low during Tuesday's Asian session. Traders are awaiting the crucial Reserve Bank of Australia (RBA) rate decision for the next catalyst.

Against a deteriorating inflation outlook, the Australian central bank is widely expected to raise interest rates by 25 basis points (bps), its fifth increase this year. To assess whether this marks the peak of the current tightening cycle or whether restrictive policy will have to remain in place for longer, traders will scrutinise the accompanying policy statement and RBA Governor Michele Bullock's remarks at the post-meeting press conference. Attention will also turn to the US midterm elections, which could generate volatility and short-term opportunities in AUD/USD.

The recent failure to extend gains above the 200-day Simple Moving Average (SMA) at 0.7058 leaves the near-term technical outlook for spot prices bearish. There are, however, signs of a modest improvement in momentum: the Moving Average Convergence Divergence (MACD) is marginally positive, while the Relative Strength Index (RSI) stands around 46. Nevertheless, AUD/USD remains below the key Fibonacci retracement cluster beginning at the 38.2% Fibo. level of 0.7027. This suggests that rallies are likely to remain vulnerable, with the path of least resistance still pointing lower.

The 23.6% retracement at 0.6977 offers initial support, followed by a more significant structural floor around 0.6896. A break below that floor would likely bring renewed, heavier selling pressure. On the upside, the first resistance level is the 38.2% Fibo. retracement at 0.7027. Beyond it lie the 200-day SMA near 0.7058 and the 50.0% retracement at 0.7068. Further hurdles stand at 0.7108 and 0.7166, ahead of the swing high at 0.7239.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

AUD/USD price action on the daily chart