AUD/USD bounces back to 0.7100, but there is a catch

It has been a challenging week for Aussie traders, with the AUD/USD pair showing strong two-way price movements. Early in the week, the pair extended gains to a fresh weekly high of 0.7120 following the Reserve Bank of Australia’s (RBA) decision. Subsequently, it sharply pulled back to the key psychological support at 0.7000 before bouncing back near 0.7100. The RBA delivered a hawkish interest rate hike as anticipated, but its statement underscored growing concerns over global oil prices and ongoing supply chain disruptions.

What's next for Aussie?

Currently, AUD/USD is attempting to stabilize around 0.7090 after a strong rebound on Thursday. However, it is premature to conclude that the consolidation phase dominated by the Aussie has ended. Bulls are struggling to sustain momentum, with upside volume remaining weak—an important factor to monitor closely. Additionally, downside risks persist amid ongoing geopolitical tensions. As such, the recent bounce appears corrective rather than the start of a new upward trend. A decisive break above the 0.7200 resistance zone will be necessary to signal a shift in the current consolidation pattern.

AUDUSD technical forecast: Upside momentum remains limited

The currency pair has been consolidating sideways over the past few trading hours following its recent surge. Despite the rebound, there is a risk that AUD/USD could revisit the 0.7000 support level if bulls fail to extend gains. It is important to note that aggressive short positions should only be considered below 0.7000, which is a key area likely to attract significant market interest.

A breakdown below 0.7000 could open the door to a more substantial decline, potentially targeting the 0.6940–0.6920 zone. Conversely, if the pair regains upside momentum and breaks above the 0.7140–0.7150 range, it may advance toward the next major resistance near 0.7190–0.7200.

Disclaimer! This material is not intended as investment advice. Past performance data does not guarantee future profits. Investing in foreign currencies may affect your returns due to their fluctuations. Any securities transaction may result in both profits and losses. The assumptions and expectations set forth in the material are only estimates that may not be accurate and may change according to current economic conditions. These statements do not guarantee future performance.