**AUD/USD Continues to Decline Amid Bearish Correctional Pressure: In-Depth Analysis**
*Based on the original article from Economies.com, authored on July 21, 2025*
The Australian Dollar (AUD) remains under broad selling pressure against the US Dollar (USD), with the AUD/USD pair extending its bearish correction trajectory. As global macroeconomic indicators point toward persistent USD resilience and weak sentiment surrounding the Aussie, traders should remain cautious in anticipating reversals or a recovery in the short term.
The most recent technical and fundamental developments surrounding the AUD/USD exchange rate suggest that bearish momentum is likely to continue unless significant support levels trigger a bounce. As of July 21, 2025, the currency pair is trading near its weekly lows and failed to breach notable resistance levels, which further confirms the downward trajectory.
This report provides an in-depth analysis of the current AUD/USD trend by examining the technical chart structure, economic drivers, monetary policies, macroeconomic factors, and future implications for forex traders.
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## Current Technical Outlook
According to the latest market update published by Economies.com, the AUD/USD pair has recently been subjected to bearish corrective activity. Here’s a breakdown of what technical analysis indicates:
– The pair continues to decline below the psychological resistance level at 0.6750.
– The price failed to stay above the critical 50-day Exponential Moving Average (EMA), indicating weakening bullish momentum.
– The descending trendline since mid-2025 remains intact.
– The pair is currently forming a minor support zone near 0.6675, which has been tested multiple times in recent sessions.
– The Relative Strength Index (RSI) remains under 50, showing that bears are still in control and that momentum has yet to shift in favor of the bulls.
Key technical levels to monitor over the short and medium term include:
– Immediate support: 0.6675, followed by 0.6620 and 0.6580.
– Immediate resistance: 0.6725, followed by 0.6750 and then a more formidable level at 0.6800.
– If the pair breaks beneath 0.6675 with strong volume, the decline could accelerate toward lower supports near 0.6600.
– Conversely, reclaiming the 0.6750-0.6800 resistance range would be necessary for any significant bullish reversal.
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## Short-Term Bearish Momentum: What’s Fueling the Decline?
Several factors are reinforcing the bearish pressure on AUD/USD, both from a global macroeconomic and domestic Australian economic standpoint. Some of the primary drivers include:
### 1. US Dollar Strength Driven by Fed Policy Outlook
– The USD has rebounded firmly, supported by expectations that the Federal Reserve will maintain high interest rates well into late 2025.
– Recent inflation data in the United States indicates resilience in core consumer prices, prompting the Fed to retain its hawkish monetary policy bias.
– Federal Reserve Chairman Jerome Powell’s remarks during recent policy meetings confirmed that additional rate hikes remain on the table if inflation persists.
– As of July 2025, the federal funds rate stands at 5.50%, with markets anticipating only one modest cut in Q4, if at all.
This policy stance keeps US bond yields elevated, attracting capital flows into USD-denominated assets and thus strengthening demand for the US Dollar.
### 2. Weak Economic Fundamentals in Australia
– Australian economic indicators have shown signs of fatigue throughout the first half of 2025.
– Sluggish GDP growth, contracting consumer spending, and stagnant wage growth are weighing on the domestic outlook.
– The Australian housing sector remains under strain due to elevated borrowing costs and reduced property demand.
– China’s ongoing economic slowdown, especially in its real estate and manufacturing sectors, reduces demand for Australian exports, including iron ore and coal, further weakening the AUD by association.
### 3. Divergence in Central Bank Policy Paths
– The Reserve Bank of
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