The AUD/USD currency pair is facing renewed selling pressure as lingering geopolitical risks maintain a bullish undertone for the US Dollar. Optimism surrounding potential US-Iran diplomacy to resolve a five-month-old conflict faded following reports from Saudi Arabia, Jordan, and Iraq on Monday regarding drone attacks. This keeps the geopolitical risk premium alive and acts as a tailwind for the safe-haven Greenback, thereby exerting downward pressure on the AUD/USD pair. Nevertheless, traders remain hesitant to place aggressive directional bets ahead of the crucial two-day FOMC policy meeting commencing later today.
Technical Outlook and Moving Averages
Recent repeated failures to break past the 38.2% Fibonacci retracement level of the May-June downturn indicate that the recovery originating from the 200-day Simple Moving Average has lost momentum. Even so, the Moving Average Convergence Divergence histogram stays marginally positive while the MACD line remains above the signal line. This hints that bullish momentum persists, even though a neutral Relative Strength Index suggests only modest directional conviction.
Broader Market Movements Across Currencies and Commodities
Meanwhile, GBP/USD edged lower during Tuesday's Asian hours while remaining in positive territory around the 1.3290 level. The currency pair faces pressure as the US Dollar stabilizes due to market caution ahead of the upcoming Federal Reserve policy decision on Wednesday. Similarly, EUR/USD consolidates near its monthly trough, trading around the mid-1.1300s during the European morning on Tuesday, pressured by persistent demand for the US Dollar. Gold maintains its offered tone during the Asian session on Tuesday, trading just below $4,050 and down 0.85% for the day following its failure to find acceptance above $4,100 in the previous session. Additionally, Ripple and Stellar remain under pressure after suffering losses of over 4% and 5% respectively on the prior day.
