AUDUSD faces critical support and resistance zones following the Fed's more hawkish stance, with traders eyeing the 0.7000 level and 200-hour MA.
Market Overview
The AUDUSD pair entered a period of consolidation on Thursday, as buyers and sellers locked horns around key technical levels following the Federal Reserve's more hawkish-than-expected policy signals. Prior to the FOMC decision, the pair found support near the rising 100-hour moving average at 0.7055 and the falling 200-hour moving average at 0.7042. However, the Fed's emphasis on sustained higher interest rates triggered a sharp selloff, pushing the pair below both moving averages.
Technical Breakdown
The decline accelerated to 0.6994, briefly breaching the psychologically significant 0.7000 level and the 61.8% retracement at 0.7002 of the March rally. A recovery during the Asian session saw the pair rebound to 0.7041, testing the 200-hour MA, before sellers reasserted control. Support near 0.7000 held firm, with the low reaching 0.70015, just below the 61.8% retracement at 0.70025.
Key Levels to Watch
- Support: 0.7000 (psychological), 0.6978 (last week's low), 0.6938-0.6962 (March support zone)
- Resistance: 0.7042 (200-hour MA), 0.7055 (100-hour MA), 0.7083 (100-day MA)
Sellers require a sustained break below 0.7000 to target 0.6978 and the broader March support. Buyers, meanwhile, must reclaim the 200-hour MA and the 100-hour MA to regain momentum, with the 50% midpoint of the March rally near 0.7055 adding significance to that zone.
Implications for Traders
The Fed's hawkish pivot reinforces the US dollar's dominance, pressuring commodity-linked currencies like the AUD. Risk sentiment remains cautious amid persistent inflation concerns and tighter monetary policy expectations. Traders should monitor upcoming US economic data and Fed commentary for cues on rate path adjustments, which could further influence AUDUSD's trajectory.
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