AUD/USD extends its decline as rising expectations of a Federal Reserve rate hike continue to support the US dollar

AUD/USD extended its sharp decline for a second consecutive session, falling to its lowest level since early April as the Australian dollar remained under heavy pressure from broad US dollar strength. Expectations that the Federal Reserve could begin raising interest rates as early as September have continued to fuel demand for the greenback, weighing heavily on the Aussie.

Further pressure came from a renewed slide in commodity and metal prices, adding to the bearish sentiment surrounding the Australian currency. As a result, AUD/USD had fallen more than 2.2% from Tuesday’s opening levels by the early US trading session on Wednesday.

The pair is now approaching key support levels at 0.6853, where the 200-day moving average is located, and 0.6833, the March 30 higher low. However, sellers may encounter resistance to further downside acceleration, as daily momentum indicators have moved into oversold territory.

While a short-term corrective bounce cannot be ruled out, the broader outlook remains negative. Any recovery attempts are likely to be capped by the former Fibonacci support at 0.6950, representing the 38.2% retracement of the 0.6421–0.7277 rally, which has now turned into resistance and should help preserve the dominant bearish structure.

A decisive break below the critical 0.6833 support would strengthen bearish momentum, signaling the potential for a trend reversal and opening the way for a deeper correction of the broader uptrend from 0.5914 to 0.7277.

Res: 0.6950; 0.7000; 0.7056; 0.7075
Sup: 0.6853; 0.6833; 0.6800; 0.6756