The AUD/USD pair faced new selling pressure during the Asian session on Wednesday, reversing much of the gains seen the previous day. That said, it has managed to hold above the 0.7150 mark, remaining within its recent trading range.
Today’s data revealed that Australia’s economy expanded by 0.3% in the first quarter of 2026—quite a dip from the 0.8% growth recorded in the previous quarter and below the expected 0.5% uptick. Coupled with slowing consumer inflation and an increase in the unemployment rate to its highest point in nearly four-and-a-half years in April, these factors are dampening expectations for a possible interest rate hike by the Reserve Bank of Australia (RBA) in June.
This situation casts a shadow over promising Chinese services PMI and is adding pressure on Australia. Additionally, ongoing uncertainty about peace talks between the US and Iran, along with assertive stances from the US Federal Reserve, continues to bolster the US dollar (USD), which further impacts the AUD/USD pair. But, it’s worth noting that the selling pressure hasn’t been overwhelming;
So, a bit of caution is advisable before anticipating significant declines.
From a technical viewpoint, spot prices display a somewhat positive short-term trend, staying above the 50-day simple moving average (SMA), with a series of Fibonacci retracements providing support. The Relative Strength Index (RSI) is bouncing around just above the neutral level of 51, indicating modest buying potential. On the flip side, the Moving Average Convergence Divergence (MACD) is slightly negative, which implies that, while upward momentum exists, it isn’t particularly robust just yet.
The mixed signals indicate that if there’s a break below the 23.6% Fibonacci retracement around 0.7165, which has been trending up from March to May, we might see solid support near the 50-day SMA at 0.7118. If the decline intensifies, support could subsequently be found at the 38.2% retracement level near 0.7102. On the upside, a notable resistance point is around the recent cycle high at 0.7267. A daily close above that would be needed to reinforce a bullish trajectory and potentially pave the way for further upward movement.
