Australian Dollar falls near 0.7000 ahead of US PCE inflation data

• AUD/USD breaks the 0.7000 mark, struggling ahead of US inflation data.
• US PCE is the key catalyst, as a stronger-than-expected reading could support a hawkish Fed stance and put renewed pressure on the pair.
• China remains important to the Aussie; the PBoC left rates unchanged at 3% as expected.

The AUD/USD pair fell near the 0.700 area on Monday, struggling to extend gains as investors remain cautious ahead of the upcoming US Personal Consumption Expenditures Price Index (PCE), the Federal Reserve’s (Fed) preferred inflation gauge.

Attention now turns to the upcoming US PCE inflation report, which will be released on Thursday. A stronger-than-expected reading could reinforce expectations that the Fed will maintain a hawkish stance, supporting the Greenback and putting renewed pressure on AUD/USD.

The People's Bank of China (PBoC) left interest rates unchanged earlier in the day. China-related sentiment also remains important for the Australian Dollar, given Australia’s strong trade exposure to the world’s second-largest economy.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6997, keeping a bearish near-term tone as it sits beneath both the 20-period and 100-period Simple Moving Average (SMA) at roughly 0.7013 and 0.7075. The pair is capped by a tight band of nearby resistance levels just overhead, while the Relative Strength Index (RSI) around 38 suggests persistent downside pressure rather than an imminent recovery.

On the topside, initial resistance is seen at 0.7002, followed by a more congested barrier near 0.7013–0.7020, where a horizontal cap aligns with the 20-period SMA. A sustained break above these levels would be needed to ease immediate selling pressure, with the 100-period SMA near 0.7075 acting as a higher resistance hurdle. On the downside, the first notable support comes in at 0.6995, where a horizontal floor guards against a deeper extension of the recent decline.

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