The AUD/USD currency pair experienced a partial recovery during the Asian session on Thursday, rebounding from the previous day's significant losses that brought it down to the 0.7100 level, marking a two-week low [1]. This recovery was supported by expectations that the Reserve Bank of Australia (RBA) will maintain its hawkish monetary policy stance, which helped counterbalance the impact of mixed official PMI data from China [1].
On the other hand, the US Dollar (USD) maintained a strong position, trading near its highest level since April 13. This strength was attributed to ongoing geopolitical uncertainties related to stalled US-Iran peace talks and reduced expectations for further policy easing by the US Federal Reserve (Fed), both of which underpinned the USD and limited the upside potential for the AUD/USD pair [1].
From a technical perspective, the AUD/USD pair has struggled to sustain levels above 0.7200 and has been range-bound for the past two weeks. The recent decline confirmed a breakdown below the 0.7130-0.7125 support area, which includes the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 23.6% Fibonacci retracement level of the recent recovery from the year-to-date low in March [1]. Technical indicators such as the Relative Strength Index (RSI) at around 40 and a flattening MACD in negative territory suggest modest bearish momentum, though downside pressure appears to be softening [1].
Immediate resistance is identified at 0.7131, with a stronger barrier near the recent cycle high of 0.7223. On the downside, support levels are seen at 0.7100, followed by the 38.2% retracement at 0.7074, the 50.0% level at 0.7027, and deeper supports at 0.6981 and 0.6915, where buyers may attempt to slow any further decline [1].
In terms of broader currency movements, the US Dollar showed the strongest performance against the Euro, with a 0.11% gain, while its change against the Australian Dollar was -0.08% for the day [1].
CONCLUSION
The AUD/USD pair's recovery from a two-week low is being capped by a strong US Dollar, supported by geopolitical uncertainties and a firm Fed stance. While the RBA's hawkish outlook provides some support for the Australian Dollar, technical indicators suggest that bearish momentum persists, and further gains may be limited. Market participants are likely to watch key support and resistance levels for signs of the next directional move.