AUD/USD is losing ground after recording an escalate of over 0.5% in the previous day, trading at around 0.7160 during European hours on Tuesday. Technical analysis of the daily chart shows that the pair is moving within a rectangle pattern, which suggests consolidation as neither the bulls nor the bears have enough momentum to take control of the market.
The AUD/USD pair is positioned between its short-term and medium-term trend references, sitting just below the nine-day exponential moving average (EMA) while holding above the 50-day EMA, leaving the short-term tone broadly neutral.
A 14-day relative strength index (RSI) of around 50 suggests directionless momentum following a recent pullback from overbought territory, indicating consolidation rather than an immediate extension of the trend.
The AUD/USD pair is currently testing the immediate barrier at its nine-day exponential moving average (EMA) of 0.7163. A successful break above this short-term average is expected to accelerate price growth. This potential strength could support the pair as it climbs towards the upper boundary of its current rectangular pattern around 0.7270, with the next main target being 0.7277, which is the peak recorded on May 6 and the highest level since June 2022.
Conversely, if AUD/USD is at risk of rejection, the downside risk could push the pair back towards the 50-day EMA at 0.7118. A break below this support level will likely cause the pair to test the lower boundary of the rectangular pattern near 0.7080. If selling pressure intensifies and forces a break below this consolidation zone, it could drag the pair down towards the 0.6833 area, marking a return to the four-month low recorded on March 30.
(The technical analysis for this story was written with the aid of an AI tool.)
