The AUD/USD pair extended its decline for the third straight day, reaching a fresh three-week low. This continued weakness reflects a shift in sentiment as investors scale back expectations of aggressive Fed easing.
The US Producer Price Index showed the fastest increase since 2022, reigniting inflation concerns. The high inflation data and a weaker performance in equity markets drove renewed interest in the US dollar. As a result, money flowed out of the risk-sensitive Australian dollar.
AUD/USD Technical Analysis – Price Uncertainty
The 4-hour chart for AUD/USD shows that the pair has broken below the 0.6440 level. A head and shoulders pattern formed near the 0.6550 resistance, followed by a breakdown below 0.6440. This technical structure suggests that the short-term trend remains bearish.
The breakdown could push the pair toward the immediate support at 0.6380. A break below 0.6380 may lead to a drop toward the 0.6320 level.
However, despite this bearish setup, the overall direction remains uncertain. The pair appears oversold in the current region, increasing the possibility of a rebound. As long as the price stays below 0.6550, the short-term bias will remain bearish. However, a break above 0.6550 would shift the short-term outlook to bullish.
