AUD/USD Price Forecast: Bears await break below 0.7000 ahead of RBA on Tuesday

The Australian Dollar (AUD) against the US Dollar (USD) is holding just above the 0.7000 level at the start of a new week, trading near its lowest point since August 4. Traders are waiting for the Reserve Bank of Australia (RBA) meeting on Tuesday, during which a 25-basis-point (bps) hike is anticipated. The US-China trade truce extension and a bullish US Dollar, driven by expectations of a Fed rate hike in October, provide support for the AUD.

However, a stronger US Dollar and concerns over oil-driven inflation and elevated US bond yields are limiting AUD/USD gains amid geopolitical tensions between the US and Iran. From a technical standpoint, the AUD/USD pair is trading below the crucial 200-day Simple Moving Average (SMA) and is supported by the 61.8% Fibonacci retracement level at 0.7007.

Momentum indicators suggest downside pressure may continue, with the Relative Strength Index (RSI) around 35 indicating oversold conditions. A decisive break below the 0.7000 level could expose a deeper support band around the 78.6% level at 0.6945, with the previous cycle low at 0.6866 serving as a more significant structural floor.

A break above the 200-day SMA at 0.7026 and the 50.0% retracement at 0.7051 would open the path to the 38.2% level at 0.7094 and the 23.6% retracement at 0.7148, although the broader bearish structure would persist below the anchor high around 0.7235.