AUD/USD Price Forecast: Upside bias intact despite mixed momentum
AUD/USD reverses its earlier gains on Monday as a broadly firmer US Dollar (USD) and hawkish Federal Reserve (Fed) expectations cap the upside.
The Australian Dollar (AUD) remains supported against the US Dollar (USD) despite mixed momentum, as expectations of another rate hike from the Reserve Bank of Australia (RBA) provide a bullish backdrop. Currently trading around 0.7123, the pair recently reached a high of 0.7140. The Australian central bank has already implemented three 25-basis-point hikes since the beginning of the year, bringing the cash rate to 4.35%.
With inflation exceeding its 2%-3% target, the RBA is widely anticipated to raise rates by another 25 bps on September 29.
Technical indicators suggest a bullish path, with the AUD/USD pair staying above its key daily Simple Moving Averages (SMAs). However, momentum is inconsistent, with the Relative Strength Index (RSI) near a neutral 48 and the Moving Average Convergence Divergence (MACD) dipping into negative territory, indicating waning upside pressure.
Support levels are found at the 38.2% Fibonacci retracement at 0.7095, the 50-day SMA at 0.7088, and the 100-day SMA at 0.7078. Conversely, resistance is observed at the 23.6% Fibonacci retracement at 0.7149, with a sustained breakout leading to the 0.7237 cycle barrier.
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