Bearish Correction Looms as Structural Resistance is Reclaimed

Forex

Economic

Summary:

A bearish transition in the histogram, coupled with a signal line crossover toward the negative zone, would provide the necessary technical confirmation for a sustained move to the downside.

SELL AUDUSD

EXP

TRADING

0.71289

Entry Price

0.69860

0.72350

0.70720 -0.00035 -0.05%

0.0

Pips

Flat

0.69860

Exit Price

0.71289

Entry Price

0.72350

Geopolitical tensions surrounding the ongoing conflict between the United States and Iran remain the definitive focal point for global participants. As the hostilities enter their twelfth day with no discernible signs of de-escalation, market sentiment remains fraught with systemic uncertainty. The military landscape continues to intensify, with the U.S. and Israel conducting strategic strikes against Iranian military installations, while Tehran retaliates via missile and drone incursions targeting American and Israeli assets across the broader region.

On the economic front, the Consumer Price Index (CPI) for February aligned perfectly with expectations and the January print, holding steady at 2.4% year-over-year. Core figures—which exclude the volatile components of food and energy—advanced by 2.5%, precisely meeting consensus estimates. On a month-over-month basis, Core CPI edged higher by 0.2%, representing a marginal deceleration from the 0.3% increase recorded in January, while the annual rate remained anchored at 2.5%.

These data points have reinforced the market’s conviction that the Federal Reserve will maintain a highly cautious policy trajectory, as inflation continues to trend stubbornly above the central bank's 2% target. Investors are now pivoting their focus toward the upcoming Personal Consumption Expenditures (PCE) report scheduled for Friday, a release that is expected to critically shape monetary policy expectations for the coming months.

The recent Non-Farm Payrolls (NFP) report further complicated the macro narrative, revealing a startling contraction of 92,000 positions. This result starkly contradicted consensus forecasts that had anticipated a gain of 59,000 jobs. Consequently, the unemployment rate trended higher to 4.4%, though it remains marginally below the 4.5% threshold projected by the Fed for 2026. Despite this visible cooling in the labor force, consumer resilience remains remarkably robust; the Census Bureau reported that Retail Sales hit $733.5 billion in January, defying the projected 0.3% decline with a significant 3.2% year-over-year expansion.

Across the Pacific, interest rate expectations for the Reserve Bank of Australia (RBA) have sharpened. Markets are currently pricing in a 75% probability of a 25-basis point hike at next week’s meeting, according to Reuters. Such a move would elevate the official cash rate to 4.10%, signaling that the RBA remains committed to its restrictive stance in the face of global inflationary pressures. Bearish Correction Looms as Structural Resistance is Reclaimed_1

Bearish Correction Looms as Structural Resistance is Reclaimed_1

Technical Analysis

From a technical perspective, AUD/USD recently executed a sharp bullish impulse that breached the horizontal resistance at 0.7148. However, this level was swiftly reclaimed by sellers, suggesting a "fakeout" and a return to a high-pressure supply zone.

If the price action achieves a decisive 4-hour (H4) close beneath the 9-period Moving Average—currently situated at 0.7135—it would likely validate the inception of a corrective phase to the downside. Along this downward trajectory, the 100 and 200-period Moving Averages (MAs), located at 0.7069 and 0.7045 respectively, will serve as primary technical objectives. Furthermore, the local support floor at 0.6985 aligns precisely with the primary ascending trendline, creating a formidable confluence zone that could act as a terminal target for this correction.

Our analysis of momentum oscillators reinforces this bearish bias. The RSI recently struck the 67 level, moving dangerously close to overbought territory and leaving the pair vulnerable to a sell-side intervention. Simultaneously, while the MACD is still printing a bullish histogram, the bars are visibly diminishing in size.

A bearish transition in the histogram, coupled with a signal line crossover toward the negative zone, would provide the necessary technical confirmation for a sustained move to the downside. Traders should remain vigilant for a breakdown of the dynamic 9-MA to trigger the move.

Trading Recommendations

Trading direction: Sell

Entry price: 0.7128

Target price: 0.6986

Stop loss: 0.7235

Validity: Mar 20, 2026 15:00:00

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Bearish Correction Looms as Structural Resistance is Reclaimed

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