AUD/USD Price Forecast: Key Support at 0.7125 Confluence Under Pressure Amid Stronger USD

The AUD/USD pair continued its decline during the Asian session on Wednesday, touching a one-and-a-half-week low and trading around the 0.7135 region. This marks the second consecutive day of losses for the pair.

The initial positive reaction to Australia’s stronger-than-expected Q2 GDP data faded rapidly, giving way to sustained US Dollar (USD) buying. The greenback drew support from rising expectations of Federal Reserve (Fed) interest rate hikes and escalating geopolitical tensions between the US and Iran. This shift suggests that the path of least resistance for AUD/USD remains to the downside, supporting the case for a further pullback from last Friday’s peak near 0.7200—the highest level since mid-May.

Any further downside is likely to encounter strong support near the 0.7125 confluence zone, which includes 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 confluence suggests a supportive technical backdrop, despite the Relative Strength Index (RSI) drifting lower toward the mid-30s. Furthermore, the Moving Average Convergence Divergence (MACD) indicates a slowdown in momentum rather than an immediate, outright bearish reversal.

However, a decisive break below the 0.7125 support level could expose subsequent Fibonacci support levels at 0.7074, 0.7033, and 0.6992, with broader structural support extending toward 0.6934 and 0.6860. On the upside, the 0.7170 horizontal zone may serve as an immediate resistance hurdle ahead of the key 0.7200 level. A clear breakthrough above 0.7200 would likely act as a fresh catalyst for bullish traders. Nonetheless, the short-term bullish outlook remains valid as long as the pair holds above the critical 0.7125 confluence zone.

(The technical analysis of this story was generated with the assistance of an AI tool. Learn 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.

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