AUD/USD Price Forecast: Expected to attract support around 0.6830 amid growing hawkish Fed expectations.

• The Australian Dollar remains under pressure versus the US Dollar as expectations for further Federal Reserve rate hikes stay firm.
• Investors are now focusing on the US PCE Inflation data for fresh signals regarding the Fed’s future monetary policy direction.
• Meanwhile, Australia’s labor market showed resilience, with employers adding 40.3K new jobs in May, surpassing market forecasts of 25K.

The AUD/USD pair edges slightly lower to around 0.6890 during Thursday’s European session as the Australian Dollar remains under mild pressure against the US Dollar. The Greenback continues to stay supported by expectations that the Federal Reserve’s next policy move could be another rate hike.

The US Dollar Index (DXY), which measures the USD against six major currencies, trades near 101.55 at the time of writing, remaining close to Wednesday’s more-than-one-year peak of 101.80.

Data from the CME FedWatch Tool shows markets are pricing in nearly an 82% probability of at least one Fed rate increase this year.

Traders are now turning their attention to the US Personal Consumption Expenditures (PCE) Price Index for May, scheduled for release at 12:30 GMT, as the report could provide fresh insight into the Fed’s future interest-rate path.

Meanwhile, Australia’s May labor market figures exceeded expectations. The Australian Bureau of Statistics reported that employers added 40.3K jobs during the month, well above forecasts of 25K. This follows April’s revised decline of 40.7K jobs, compared with the previously reported 18.6K drop. The unemployment rate also eased to 4.4% from 4.5%, matching market expectations.

Technical Analysis

AUD/USD trades near 0.6890 and continues to show a bearish short-term outlook, with the pair remaining below the 20-day Exponential Moving Average (EMA) at 0.7025. Price action has continued to drift away from the key trend indicator, while the Relative Strength Index (RSI) stands at 26.6 in oversold territory, suggesting that bearish momentum remains strong even though the recent decline may be overstretched.

On the upside, the first major resistance is seen around the 20-day EMA near 0.7025. A recovery above this level would help reduce immediate downside pressure.

On the downside, key support is located at the March 30 low of 0.6833. A break beneath this area could open the door for a deeper decline toward the January 7 high near 0.6766.