AUD/USD Price Forecast: Tumbles below 0.7000, bearish technical signals emerge

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AUD/USD slumps to around 0.6980 in Tuesday’s early European session, down 0.45% on the day.
The pair turns mildly bearish in the near term as the RSI momentum holds below the midline.
The first upside barrier emerges at 0.7065; the initial support level to watch is 0.6920.

The AUD/USD pair tumbles to near 0.6980 during the early European session on Tuesday, pressured by escalating tensions in the Middle East. US President Donald Trump said on Monday that he will postpone his deadline for Iran to reopen the Strait of Hormuz by five days. He further stated that the US held 'productive conversations' with Tehran, but Iran denied it had any dialogue with Washington. Signs of a prolonged conflict between the US and Iran could boost a safe-haven currency such as the US Dollar (USD) and create a headwind for the pair.

On the other hand, a hawkish stance from the Reserve Bank of Australia (RBA) might help limit the Aussie’s losses. The Australian central bank raised its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% at its March meeting last week. This marks the second consecutive rate hike of the year, following a 25 bps increase in February.

Technical Analysis:

In the daily chart, the near-term bias of AUD/USD turns mildly bearish after the pair slipped back from the 0.71 area and lost the upper hand it had above the upper Bollinger Band, with price now tracking under the 20-day middle band near 0.7070. The Bollinger Bands have flattened and started to contract after the recent expansion, signaling fading upside momentum and a transition into a corrective phase. The RSI has retreated from overbought territory toward the mid-40s, confirming easing bullish pressure and favoring a downside bias while below the recent highs.

Initial resistance now stands at 0.7065, aligning with the Bollinger middle band and capping rebounds ahead of a stronger barrier at 0.7100, where recent closing highs cluster. A daily close above 0.7100 would reopen the topside toward 0.7150 and reassert the broader uptrend. On the downside, immediate support emerges at 0.6920, followed by 0.6880, where prior reaction lows coincide with the rising 100-day exponential moving average around 0.6860 to form a support zone. A break beneath this area would expose deeper retracement toward 0.6800 and undermine the broader bullish structure established over previous weeks.

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

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What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.