AUD/USD Price Forecast: Near two-week low, pair remains below 0.7000 ahead of RBA decision

• Selling pressure on AUD/USD pauses as the pair consolidates after hitting a two-week low in Asian trading.
• With the RBA decision ahead, traders appear reluctant to initiate fresh directional positions.
• Conflicting technical signals also call for caution before taking positions for additional declines.

Bearish sentiment keeps AUD/USD in consolidation below the psychological 0.7000 level, with traders awaiting fresh direction from the crucial Reserve Bank of Australia (RBA) rate decision. The pair had earlier reached a new two-week low during Tuesday's Asian session.

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 create short-term opportunities in AUD/USD.

The recent inability to extend gains beyond the 200-day Simple Moving Average (SMA) at 0.7058 leaves spot prices with a bearish near-term bias. Momentum indicators offer a somewhat different picture: the Moving Average Convergence Divergence (MACD) is marginally positive, while the Relative Strength Index (RSI), at around 46, points to a modest improvement in momentum. Nevertheless, AUD/USD remains below the key Fibonacci retracement cluster beginning at the 38.2% Fibo. level of 0.7027. This positioning suggests that rallies are likely to remain vulnerable, with downside still the path of least resistance for spot prices.

On the downside, the first support lies at the 23.6% retracement of 0.6977, followed by a more significant structural floor near 0.6896. A breach of that floor would likely bring renewed, stronger bearish pressure. Any recovery would initially face resistance at the 38.2% Fibo. retracement of 0.7027, then the 200-day SMA around 0.7058 and the 50.0% retracement of 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: daily chart