The pair trades near 0.7130 as Fed rate hike bets and geopolitical risks lift the USD, offsetting RBA tightening expectations.
The AUD/USD pair remains under pressure in early European trading, hovering around 0.7130-0.7125 after touching a monthly low the previous day. A rebound in the USD, driven by expectations of a Fed rate hike in 2026 and ongoing geopolitical tensions, has weighed on the pair.
Minutes from the RBA’s May meeting reinforced market bets for another rate increase in August, but this has failed to support the Aussie. Technical indicators suggest a bearish bias, with the pair trading below its 100-period EMA and key Fibonacci levels.
The Relative Strength Index near 32 signals persistent downside pressure, while the MACD remains flat but negative. Initial support is seen at the 38.2% Fibonacci retracement near 0.7108.