AUD/USD Forecast: Near-term outlook appears deteriorated

The strong resumption of the bid bias in the US Dollar (USD) prompted an equally marked retracement in the Aussie dollar and the rest of its risk-related peers, pushing AUD/USD to multi-session lows near 0.6500 on Wednesday.

In the meantime, the strong rebound in iron ore prices failed to mitigate the increased downward trend of the Australian dollar, while the knee-jerk in copper prices accompanied the daily pullback in spot.

Regarding the Reserve Bank of Australia (RBA), the recent release of its March meeting Minutes affirmed the bank's stance to refrain from considering tightening monetary policy. RBA cash rate futures still indicate an expectation of just under 50 bps of policy rate cuts in 2024, with the initial cut anticipated in November.

It's worth noting that the RBA is among the last G10 central banks expected to contemplate interest rate adjustments this year.

With the Federal Reserve's (Fed) reinforced stance on maintaining tighter policies over an extended period, accentuated by recent US inflation data, and the anticipation of the RBA beginning an easing cycle later in the year, AUD/USD faces increased potential for extended and intensified downward movements in both the short and medium terms.

AUD/USD daily chart

AUD/USD short-term technical outlook

If sellers remain in control, AUD/USD could fall to the April low of 0.6480 (April 1), followed by the March low of 0.6477 (March 5) and the 2024 bottom of 0.6442 (February 13). Breaking below this level may result in a test of the 2023 low of 0.6270 (October 26), prior to the round level of 0.6200.

Further upward is projected to initially test the April top of 0.6644 prior to the March peak of 0.6667 (March 8) and the December 2023 high of 0.6871. Further north, the July top of 0.6894 (July 14) precedes the June peak of 0.6899 (June 16) and the critical 0.7000 mark.

Looking at the big picture, the pair is projected to maintain its bearish trend while below the important 200-day SMA.

On the 4-hour chart, the pair's constructive bias appears threatened. The support comes at 0.6498 ahead of 0.6480. On the other hand, immediate resistance is at 0.6644, before 0.6667. Furthermore, the MACD stayed bullish, and the RSI fell to around 31.