The Australian dollar remains range-bound as RBA policy expectations clash with Fed rate hike bets and geopolitical risks.
The AUD/USD pair remains stuck in a narrow range near 0.7050 during early European trading, marking its third consecutive day of consolidation. The Reserve Bank of Australia’s hawkish stance continues to support the Aussie, though upward momentum is capped by a resilient US dollar amid inflation concerns and safe-haven demand.
Technical indicators suggest a mildly bullish bias, with the Relative Strength Index at 58 and a modestly positive MACD. However, the pair struggles to break above the 100-day Simple Moving Average and the 50% Fibonacci retracement level of 0.7071, signaling slowing upside momentum. A sustained move beyond this level could target 0.7120, the 61.8% retracement.
The US Dollar Index holds onto weekly gains as volatile oil prices fuel expectations of at least one more Federal Reserve rate hike. Geopolitical uncertainties further bolster the greenback’s safe-haven appeal, limiting the AUD/USD pair’s advance.