AUD/USD Under Pressure as Dollar Hits Two-Week High

Traders' Opinions

Summary:

AUD/USD falls toward 0.7135 as Fed hike expectations lift the Dollar. Strong Australian GDP has strengthened the case for an RBA hike, but has so far failed to reverse the pair's decline.

SELL AUDUSD

EXP

TRADING

0.71350

Entry Price

0.70300

0.72100

0.71655 +0.00222 +0.31%

0.0

Pips

Flat

0.70300

Exit Price

0.71350

Entry Price

0.72100

The Australian Dollar remains under pressure on Wednesday, with AUD/USD slipping toward 0.7135 as persistent expectations for a September Federal Reserve rate hike continue to favour the US Dollar. The DXY has climbed toward 99.75, its highest level in more than two weeks.

Markets have become increasingly cautious about the Fed outlook as rising energy costs threaten to keep inflation elevated. MUFG notes that around 17 basis points of tightening are currently priced for the September 16 meeting, while Fed Governor Michael Barr has also indicated that additional rate hikes may be necessary if inflation remains high.

Attention now turns to the US ADP employment report, where private payrolls are expected to increase by 48K in August, slightly above July’s 44K gain.

The Aussie, however, is receiving some underlying support from stronger domestic growth figures. Australia's economy expanded 0.4% quarter-on-quarter, beating both expectations and the previous 0.3% reading, while annual growth came in at 2.1%, above forecasts of 1.8%.

TD Securities believes the stronger GDP details reinforce the case for another RBA move and now expects a 25-basis-point hike later this month, taking the cash rate to 4.60%. A further increase before year-end remains possible, although it is not the bank's base case.

For now, the stronger Australian growth picture is being overshadowed by Dollar demand and Fed tightening expectations, leaving AUD/USD vulnerable around 0.7135 despite an increasingly supportive RBA outlook.

Technical Analysis

The AUD/USD 4-hour chart is showing clear signs of a bearish shift, with the pair retreating sharply from the 0.7190–0.7200 resistance zone and now testing the rising trendline that has supported the broader advance since late July. Price is trading around 0.7135, placing the market at an important decision point.

The recent rejection near 0.7200 has disrupted the previous sequence of higher highs. Since then, recovery attempts have struggled to regain momentum, while price has repeatedly returned toward the ascending trendline. A sustained break below the 0.7120–0.7135 region would confirm that the bullish structure is beginning to unwind and increase the likelihood of a deeper correction.

The first major downside area sits around 0.7090–0.7100. This zone could generate a temporary rebound, but if sellers force a break beneath it, attention would shift toward 0.7020–0.7030, which represents the next significant demand region.

A deeper deterioration would expose 0.6950–0.6960, followed by the larger 0.6870–0.6890 support zone. The latter represents the broader bearish objective should the current trendline breakdown develop into a more substantial reversal.

For buyers to regain control, AUD/USD would need to defend the current trendline and recover above 0.7150–0.7160. A move back through 0.7190 would be required to restore the stronger bullish structure. Until then, the rejection from 0.7200 and growing pressure on the ascending trendline leave the pair vulnerable to further downside.

TRADE RECOMMENDATION

SELL AUD/USD

ENTRY PRICE: 0.7135

STOP LOSS: 0.7210

TAKE PROFIT: 0.7030

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

AUD/USD Under Pressure as Dollar Hits Two-Week High

Technical Analysis

Risk Disclosure