**AUD/USD Weakens Amid Bearish Technical Outlook and Global Market Drivers**
*By Economies.com. Extended and enhanced version for detailed analysis.*
The Australian Dollar (AUD) exhibited a visible decline against the US Dollar (USD) in the trading session of July 21, 2025, maintaining a strong bearish correctional tendency. This downtrend is rooted in a combination of technical indicators, policy expectations, and macroeconomic conditions both within Australia and globally. As traders and investors approache the upcoming trading sessions, technical and fundamental cues suggest the AUD/USD pair may face further downside pressure in the near term unless key technical levels are broken to the upside.
This article breaks down the movement of the AUD/USD exchange rate, explores its technical and fundamental context, and outlines the potential direction for the pair.
## Current Technical Analysis for AUD/USD
As noted in the original analysis by Economies.com, the AUD/USD exchange rate continues its downward correction pattern, evident through consistent failure to breach established resistance levels, in particular the 0.6780 zone. The pair has been displaying sustained bearish momentum amidst the following technical signals:
– The price action remains below the 50- and 100-day Exponential Moving Averages (EMAs), indicating a clear bearish tendency in the medium term.
– The RSI (Relative Strength Index) stands below the 50 mark, reinforcing continued downside risks in the market.
– Failure to break above the 0.6780 level marks ongoing weakness in buyer volume, reinforcing pressure from sellers aiming to retest support areas.
– The MACD (Moving Average Convergence Divergence) signal has shifted into negative territory, supporting bearish continuation.
Market sentiment for the AUD/USD is tilted toward further declines unless the pair can decisively breach the upper resistance level and stabilize above 0.6780 with strong momentum.
## Targets and Support Levels
According to Economies.com, the immediate downside targets for the AUD/USD pair are still intact, with the price aiming toward critical Fibonacci retracement levels from the most recent bounce. The following levels are expected to play key roles:
– First support: 0.6680 (a major short-term support zone)
– Second support: 0.6625 (near the 61.8% Fibonacci retracement level)
– Third, more medium-term support: 0.6560 (a psychological and technical floor)
Should the bearish correction persist uninterrupted, these targets may be tested over the upcoming sessions. Conversely, bullish control requires:
– A successful close above 0.6780, leading to a potential move toward 0.6865 and 0.6920 in the extended term.
## Broader Fundamental Factors Impacting the AUD/USD Exchange Pair
To understand recent AUD/USD behavior, it’s necessary to explore the macroeconomic context in which the pair trades. The Australian Dollar’s decline is not occurring in isolation but is influenced by several fundamental drivers that continue to shape market activity. These include:
### 1. Divergent Central Bank Policies
The monetary policy stance between the Reserve Bank of Australia (RBA) and the US Federal Reserve remains one of the primary drivers of the AUD/USD exchange rate.
– The RBA has recently signaled a more cautious approach toward raising interest rates, reflecting concerns about softening inflation trends and domestic growth. Some officials hinted at keeping rates steady around 4.10 percent for a prolonged period, particularly as consumer spending slows under financial pressures.
– In contrast, the US Federal Reserve, as of July 2025, continues to exhibit a mildly hawkish tone. Though the rate-hiking cycle is near its peak, Fed Chair Jerome Powell recently emphasized the need for patience before considering cuts, citing labor market stability and sticky inflation. The Fed’s current benchmark rate sits near 5.25 percent, offering a substantial carry trade advantage for USD buyers.
The policy divergence favors the US Dollar, as American yields attract capital away from lower-yielding currencies like the AUD.
### 2
Read more on USD/CAD trading.