AUD/USD Slides After Failed Breakout Above 0.7160

Overall, AUD/USD has come under strong pressure as markets sharply reduced expectations for Federal Reserve rate cuts. Traders are now pricing only 18 basis points of easing by the end of 2026, down from about 60 basis points earlier in March, making US rate expectations the main driver of the pair.

From a technical perspective, the pair failed three times to hold above 0.7160 and formed a bearish engulfing candle, signaling the risk of a deeper pullback. However, momentum indicators such as RSI and MACD do not yet confirm a strong bearish shift, suggesting the outlook remains uncertain. In the near term, support around 0.7000 and the 50-day moving average will be important areas to watch.

AUD/USD Daily Chart

Looking ahead, markets will focus on the PCE inflation report, especially the consumption and income data, to see whether inflation concerns grow. At the same time, labour market data and developments in the Middle East energy situation will remain key drivers for the Australian dollar and broader market sentiment.