• AUD/USD bounces off a one-week low, though the upside potential seems limited.
• The Iran uncertainty and the hawkish Fed underpin the USD, capping spot prices.
• The bearish technical setup backs the case for a further near-term depreciation.

The AUD/USD pair recovers a few pips from over a one-week low, touched earlier this Friday, though it lacks follow-through and currently trades around the 0.7000 psychological mark.

The US Dollar (USD) rallies to a fresh high since May 2025 amid the uncertainty over the next round of US-Iran negotiations. Apart from this, the US Federal Reserve's (Fed) hawkish tilt lends additional support to the Greenback and turns out to be a key factor acting as a headwind for the AUD/USD pair.

That said, the Reserve Bank of Australia's (RBA) signal that additional rate hikes were possible if inflation persists helps limit the downside for the Australian Dollar (AUD). From a technical perspective, the AUD/USD pair has been showing resilience below the 61.8% Fibonacci retracement of the March-May upswing.

However, the recent breakdown below the 100-day Simple Moving Average (SMA) and the 50% retracement level favor bearish traders. Furthermore, the Moving Average Convergence Divergence (MACD) remains slightly negative and flat, reinforcing a weak tone rather than a momentum-driven selloff.

Adding to this, the Relative Strength Index (RSI) near 37 hints at growing downside pressure rather than outright oversold stress. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside, and any meaningful recovery attempt might still be seen as a selling opportunity.

That said, a clear break and acceptance below the 61.8% retracement around 0.7000 is needed to back the case for deeper losses to the 78.6% level near 0.6926, ahead of stronger structural support at the recent swing low around 0.6832. On the topside, initial resistance emerges at the 50.0% retracement at 0.7051.

The latter is followed by the 100-day SMA at 0.7085 and the 38.2% retracement around 0.7103. Only a sustained recovery through that cluster would ease bearish pressure and open the way toward the 23.6% retracement at 0.7167 and the cycle high near 0.7271.

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

AUD/USD daily chart