AUD/USD Price Forecast: Slides to over one-week low; 0.7125 confluence holds the key

AUD/USD turns lower following the better-than-expected Australian GDP-led uptick to mid-0.7100s.
Rising Fed rate hike bets and escalating US-Iran tensions underpin the USD, weighing on spot prices.
A break below the 0.7125 confluence should pave the way for additional losses amid a mixed setup.

Haresh Menghani FXStreet

The AUD/USD pair drops to a one-and-a-half-week low during the Asian session on Wednesday and currently trades around the 0.7135 region, down for the second straight day.

The initial market reaction to Australia's better-than-expected Q2 GDP print fades rather quickly amid some follow-through US Dollar (USD) buying, bolstered by rising US Federal Reserve (Fed) rate hike bets and escalating US-Iran tensions. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside and backs the case for an extension of the recent pullback from levels just above the 0.7200 mark, or the highest since mid-May, touched last Friday.

Any subsequent fall is more likely to find decent support near the 0.7125 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 23.6% Fibonacci retracement level of the June-August rally. This, in turn, suggests a supportive technical backdrop, even as the Relative Strength Index (14) eases back toward the mid-30s. Moreover, the Moving Average Convergence Divergence (MACD) hints at waning momentum rather than an outright bearish reversal.

A convincing break below the said support, however, would expose subsequent Fibonacci supports near 0.7074, 0.7033 and 0.6992, with broader structure extending toward 0.6934 and 0.6860. On the top side, the 0.7170 horizontal zone could act as an immediate hurdle ahead of the 0.7200 mark, which, if conquered, will be seen as a fresh trigger for bullish traders. Nevertheless, the AUD/USD pair keeps the short-term bullish tone intact as long as it sustains trading above the 0.7125 confluence.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

AUD/USD 4-hour chart

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by the Australian Bureau of Statistics on a quarterly basis, is a measure of the total value of all goods and services produced in Australia during a given period. The GDP is considered as the main measure of Australian economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

Why it matters to traders?

The Australian Bureau of Statistics (ABS) releases the Gross Domestic Product (GDP) on a quarterly basis. It is published about 65 days after the quarter ends. The indicator is closely watched, as it paints an important picture for the economy. A strong labor market, rising wages and rising private capital expenditure data are critical for the country’s improved economic performance, which in turn impacts the Reserve Bank of Australia’s (RBA) monetary policy decision and the Australian dollar. Actual figures beating estimates is considered AUD bullish, as it could prompt the RBA to tighten its monetary policy.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD declines to near 1.3500 as US-Iran tensions rise

The GBP/USD pair declines to near 1.3500 during the early European trading hours on Wednesday. Ongoing tensions in the Middle East provide some support to a safe-haven currency such as the US Dollar against the British Pound. All eyes will be on the US August jobs report later on Friday.

EUR/USD weakens below 1.1600; further consolidation cannot be ruled out

The EUR/USD pair loses traction to near 1.1575 during the early European session. The US Dollar strengthens against the Euro amid hawkish Federal Reserve stance and escalating Middle East geopolitical tensions. Traders will keep an eye on the Eurozone Retail Sales and US employment data, which are due on Friday.

Gold: Hawkish Fed prospects drag further below $4,300

Gold extends its decline on Wednesday, facing enormous pressure due to surging United States Treasury Yields and rising oil prices. In Asian trade on Wednesday, 10-year US Treasury Yields hit a record high at 4.81%, the highest level seen since November 2023. In Wednesday’s session, investors will keep an eye on the US ADP Employment Change data for August.

WTI advances to mid-$90.00s, fresh high since July 24 amid escalating US-Iran tensions

West Texas Intermediate (WTI) – the benchmark US Crude Oil price – scales higher for the third straight day – also marking the fifth day of a positive move in the previous six – and climbs to a fresh high since July 24 during the Asian session on Wednesday.

Top 3 Price Prediction: BTC, ETH, XRP under pressure as momentum indicators flag early bearish signals

Bitcoin, Ethereum, and Ripple remain under pressure, with technical indicators suggesting early weakening momentum across the top three cryptocurrencies following massive gains in August. BTC shows early bearish signals, while ETH has extended its pullback after rejection near $2,500. Meanwhile, XRP is consolidating below key support, keeping the outlook cautious.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.