The pair remains range-bound ahead of the FOMC meeting, supported by RBA rate hike expectations and a softer USD.
The AUD/USD pair trades in a tight range around the 0.7000 level during the Asian session, failing to extend a modest bullish gap. A weaker US Dollar, driven by easing inflation concerns and US-Iran diplomatic optimism, provides support.
Technical indicators suggest a near-term bullish bias, with the pair holding above the 23.6% Fibonacci retracement of its May-June decline. The 200-day Simple Moving Average and positive momentum readings further reinforce this outlook. However, traders remain cautious ahead of the Federal Reserve’s policy decision this week.
Expectations of another Reserve Bank of Australia rate hike add to the pair’s resilience, though market participants appear hesitant to take aggressive positions before key central bank events.