The AUD/USD currency pair experienced a modest recovery from the 0.6870 region, which marked a two-month low during the Asian session on Friday, supported by a softer US Dollar [1]. Spot prices reclaimed the 0.6900 mark in the last hour, although the near-term bias remains tilted in favor of bearish traders, warranting caution before positioning for further gains [1]. The US Dollar edged lower following US President Donald Trump's announcement to delay strikes on Iran’s energy infrastructure and extend the deadline to reopen the Strait of Hormuz until April 6 [1]. Additionally, the Reserve Bank of Australia's (RBA) hawkish stance provided some support to the Australian Dollar [1]. However, expectations that the US Federal Reserve (Fed) may hike rates this year due to concerns about rising inflation from elevated energy prices are likely to limit deeper USD losses and cap the AUD/USD pair [1].
From a technical perspective, the recent breakdown below the 23.6% Fibonacci retracement level of the November 2025-March 2026 upswing and the lower boundary of a short-term trading range favor bearish traders [1]. The Moving Average Convergence Divergence (MACD) indicator remains below its signal line in negative territory, reinforcing fading upside momentum, while the Relative Strength Index (RSI) around 40 signals building but not extreme bearish pressure [1]. Despite the pullback, the AUD/USD pair stays comfortably above the rising 100-day Simple Moving Average (SMA), which tempers the downside but does not negate the risk of further declines [1]. Immediate support is just above the 100-day SMA at 0.6820, with a decisive break exposing the 61.8% retracement at 0.6717 as the next bearish target [1]. On the upside, the 23.6% retracement at 0.7005 serves as the first barrier for buyers, and a daily close above this level would ease the downside bias and open the way toward the 0.7080–0.7120 band [1]. Failure to hold 0.6820 would strengthen the case for an extended correction toward 0.6720 [1].
CONCLUSION
The AUD/USD pair has rebounded from a two-month low, but technical indicators and market fundamentals suggest a prevailing bearish bias. While immediate support and resistance levels are identified, further downside remains possible if key support is breached. Traders should exercise caution given the mixed signals and ongoing geopolitical and monetary policy developments.