AUD/USD Price Forecast: Extends the range play near 0.7050; bulls await 50% Fibo. breakout

The AUD/USD currency pair continues its range-bound movement near the 0.7050 mark on Wednesday. The Reserve Bank of Australia's (RBA) hawkish stance is supporting the Australian Dollar, while a relatively strong US Dollar is acting as a restraint. The USD Index shows gains as inflation concerns linked to volatile oil prices bolster the case for at least one rate hike by the Federal Reserve (Fed).

This, combined with ongoing geopolitical uncertainties, reinforces the US Dollar's safe-haven status and contributes to capping AUD/USD's upside potential.

Technically, the pair struggles to surpass the 100-day Simple Moving Average and break through the 50% Fibonacci retracement level of the May-June decline. This suggests momentum is slowing but has not yet reversed. Momentum indicators indicate a slightly bullish near-term bias. Additionally, a Relative Strength Index (RSI) around 58 and a modest Moving Average Convergence Divergence (MACD) reading suggest underlying momentum still favors a gradual upward trend rather than a significant pullback.

If the AUD/USD pair manages to break above the 50% retracement near 0.7071, it would strengthen the outlook and push the currency pair towards the 61.8% level at 0.7120. Should this advance persist, key barriers to watch are 0.7189 and 0.7276. On the downside, initial support lies at the 100-day SMA around 0.7054, followed by a Fibonacci cluster at 0.7023 and 0.6963. Deeper support could be found at the 200-day SMA near 0.6931 and the structural low at 0.6867 if the AUD/USD pair faces intensified corrective pressure.

Analyst Haresh Menghani, with over a decade of experience analyzing global financial markets, notes that inflationary or deflationary tendencies are measured by the Consumer Price Index (CPI), which is compiled and released monthly by the US Department of Labor Statistics. While a high reading is bullish for the US Dollar, a low reading is bearish.

The Federal Reserve, responsible for maintaining price stability and maximum employment, faces inflation pressures due to supply-chain issues and bottlenecks, with the CPI currently at multi-decade highs. The Fed has already implemented measures to curb inflation and is expected to maintain an aggressive stance in the near future.