AUD/USD Faces Rejection at 100-Day SMA Near 0.7050, But Bullish Bias Remains

The Australian dollar encountered selling pressure near the 100-day simple moving average (SMA) at 0.7050, yet the broader technical outlook retains a bullish bias as long as the pair holds above key support levels.

Technical Setup: Rejection at Key Resistance

The 100-day SMA at 0.7050 has acted as a formidable ceiling, prompting a modest pullback in AUD/USD. This level coincides with a prior swing high and a Fibonacci retracement zone, reinforcing its significance as a supply area. Despite the rejection, the pair remains above the 20-day and 50-day SMAs, which are trending higher, suggesting underlying momentum is still tilted to the upside.

Traders are closely watching the 0.6950–0.6980 support zone, which aligns with a confluence of the 50-day SMA and a trendline from the October lows. A successful hold above this area would likely keep the bullish structure intact, with a potential retest of 0.7050 and beyond.

Fundamental Drivers: What’s Behind the Move?

The Australian dollar has drawn support from a combination of firmer commodity prices, particularly iron ore and copper, and a less hawkish stance from the Federal Reserve. Meanwhile, the Reserve Bank of Australia (RBA) has maintained a cautious tone, but markets are pricing in a slower pace of rate cuts compared to earlier expectations, which has underpinned the currency.

On the US side, softer inflation data has increased speculation that the Fed may begin easing policy in the first half of 2026, weighing on the US dollar. However, any surprise in upcoming US jobs or CPI data could quickly shift sentiment, making the 0.7050 level a critical battleground.

Why It Matters to Forex Traders

For traders, the rejection at 0.7050 offers a clear technical signal: a break above could open the door to the 0.7150–0.7200 region, while a failure to hold support at 0.6950 might signal a deeper correction. The pair’s direction is likely to be influenced by the next round of US economic data and any shifts in global risk appetite.

Conclusion

AUD/USD remains in a constructive uptrend despite the rejection at the 100-day SMA near 0.7050. The bullish bias is intact as long as the pair stays above the 0.6950 support. Traders should monitor key US data releases and technical levels for confirmation of the next directional move.

FAQs

Q1: What is the significance of the 100-day SMA at 0.7050 for AUD/USD?
The 100-day SMA at 0.7050 is a widely watched technical indicator that often acts as dynamic resistance. A sustained break above it could signal a bullish continuation, while a rejection may lead to a pullback.

Q2: What are the key support levels to watch in AUD/USD?
The immediate support zone is at 0.6950–0.6980, which aligns with the 50-day SMA and a trendline. A break below this area could expose the 0.6800 region.

Q3: How do US economic data affect AUD/USD?
US economic data, such as employment and inflation reports, influence Federal Reserve policy expectations. Strong data could boost the US dollar and pressure AUD/USD, while weak data may support the Australian dollar.