AUD/USD Price Forecast: Holds below 0.7000, near two-week low ahead of RBA decision

• AUD/USD consolidates its recent losses to a two-week low, touched during the Asian session.
• Traders now seem hesitant to place fresh directional bets and opt to wait for the RBA decision.
• The mixed technical setup further warrants some caution before positioning for further losses.

The AUD/USD pair enters a bearish consolidation phase below the 0.7000 psychological mark after touching a fresh two-week low during the Asian session on Tuesday as traders now look to the crucial Reserve Bank of Australia (RBA) rate decision for a fresh impetus.

The Australian central bank is widely expected to deliver a 25-basis-point (bps) interest rate hike, marking its fifth rate increase of the year amid the worsening inflation outlook. Traders will further take cues from the accompanying policy statement and RBA Governor Michele Bullock's comments during the post-meeting press conference to gauge whether this will be the peak of the current tightening cycle or if restrictive policy will need to linger longer. Apart from this, the focus will be on US midterm elections, which might infuse some volatility and produce short-term opportunities around the AUD/USD pair.

From a technical perspective, spot prices retain a near-term bearish tone following the recent failed attempt to build on the strength beyond the 200-day Simple Moving Average (SMA) at 0.7058. Meanwhile, the Moving Average Convergence Divergence (MACD) is slightly positive, and the Relative Strength Index (RSI) sits around 46, hinting at mildly improving momentum. However, the AUD/USD pair's location beneath the key Fibonacci retracement cluster starting at the 38.2% Fibo. level at 0.7027 suggests that rallies are likely to remain vulnerable and that the path of least resistance for spot prices is to the downside.

In the meantime, initial support emerges at the 23.6% retracement at 0.6977, ahead of a more important structural floor around 0.6896, where a break would likely reinstate heavier bearish pressure. On the topside, immediate resistance is located at the 38.2% Fibo. retracement at 0.7027, followed by the 200-day SMA near 0.7058 and the 50.0% retracement at 0.7068, with higher barriers at 0.7108 and 0.7166 before the swing high at 0.7239 comes into play.

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

AUD/USD daily chart