The AUD/USD currency pair experienced a third consecutive day of selling on Wednesday, dropping to its lowest level in over two weeks following the release of softer Australian consumer inflation figures [1]. Despite rebounding slightly from the Asian session low, the pair remained down approximately 0.25% for the day, trading just above the mid-0.6900s [1]. The US Dollar (USD) was also under pressure, trading below its monthly high as market participants awaited the crucial FOMC policy decision scheduled for later in the day [1].
The softer Australian CPI data was a key driver behind the AUD's weakness, with technical analysis highlighting repeated failures for AUD/USD to break above the 0.7000 psychological level and a recent move below the 0.6965-0.6960 support zone, which marked the lower boundary of a two-week range and the 38.2% Fibonacci retracement of the recent rally from June lows [1]. The Relative Strength Index (RSI) hovered near 38, indicating ongoing downside pressure, while the MACD remained slightly negative, suggesting bearish momentum was present but not accelerating [1].
Market participants are cautious ahead of the FOMC decision, with some support for the USD stemming from renewed US-Iran tensions, which have revived inflation concerns and increased bets for at least one US Federal Reserve rate hike in 2026 [1]. Should selling in AUD/USD extend, technical levels to watch include the 61.8% retracement at 0.6926, the 78.6% retracement at 0.6898, and the structural floor at 0.6863, which could attract dip-buying interest if the bearish trend persists [1].
On a weekly basis, the Australian Dollar was the strongest against the British Pound but showed weakness against other major currencies, including a 0.64% decline versus the USD [1].
CONCLUSION
AUD/USD remains under pressure after softer Australian CPI data, with technical and fundamental factors pointing to further downside risk. Market participants are closely watching the upcoming FOMC decision for additional direction, while key technical levels may provide support if the bearish momentum continues.