FX.co ★ Wiking | AUD/USD

The Australian Dollar (AUD) continues to decline against the US Dollar (USD) on Wednesday, with the currency down 0.1% to 0.7135. The strength of the US Dollar is weighing down the AUD/USD pair, as markets are convinced that the Fed will raise interest rates when it meets next week. The US Dollar Index (DXY) is currently up 0.1% and trading at 99.75, the highest level in more than two weeks. Conversely, the Australian Dollar has benefited from better-than-expected second-quarter growth figures. The GDP growth data released earlier today showed that the economy grew by 0.4%, higher than the expected 0.3%, following a 0.3% increase in the first quarter. On an annualized basis, Australia's GDP grew by 2.1%, according to the Australian Bureau of Statistics' GDP report. According to the analysts at Rabobank, these figures increase the chances of "an RBA interest rate hike this month even as the housing market tanks," something "very few Aussies would have predicted." AUD/USD is showing constructive behavior on the daily chart, trading at 0.7135 as bulls defend the recent bounce. AUD/USD is currently in a consolidation phase near its recent highs, suggesting that despite a slowdown in the uptrend, bullish sentiment remains prevalent. The pair continues to hold above the 20-day exponential moving average at 0.7118, which provides dynamic support and maintains the overall uptrend on this time frame. The current technical setup suggests that sellers have not generated enough strength to alter the prevailing bullish sentiment. Relative Strength Index is at 56, holding above 50, which is the neutral level, while being far below levels where it would be considered overbought. This signals healthy, yet controlled momentum, meaning buyers still have the upper hand without it being stretched. At the same time, the relative strength index formation allows some upside move in case of new buying pressure, while the lack of an overbought condition rules out the risk of a fast technical correction. However, on the downside, the start level at 0.7135 is the initial area of interest, while the 20-day EMA at 0.7118 is the significant support level. Provided that AUD/USD stays above the moving average, any dips could attract buying interest and be treated as corrections rather than the start of a new downtrend. The formation will weaken if the daily close is below 0.7118, which would favor sellers. On the positive side, the absence of clear overhead resistance pressure in the current formation gives the pair some room to test its potential beyond the recently established tops. A breakout to new highs will indicate a continued bullish trend and could bring further momentum buying into the market. This breakout will mean that the bulls are resolving the consolidation, not the bears as part of distribution. In general, there is a slight bullish bias in AUD/USD, with the 0.7118 support level serving as the primary technical boundary.