AUD/USD Price Analysis: Fall to trading range support near 0.6400 remains on the cards

• AUD/USD struggles to capitalize on its early uptick and attracts fresh sellers near the 0.6540 area.
• A combination of factors lifts the USD for the second straight day and exerts pressure on the pair.
• The recent range-bound price action marks a consolidation phase and favours bearish traders.

The AUD/USD pair meets with a fresh supply following an early uptick to the 0.6540 area and turns lower for the third straight day on Thursday. The intraday downfall extends through the early North American session and drags spot prices to a fresh daily low, around the 0.6440 region in the last hour.

The US dollar catches fresh bids and looks to build on the overnight goodish bounce from a two-week low, which, in turn, is seen exerting pressure on the AUD/USD pair. The prospects for a more aggressive policy tightening by the Fed, along with the risk-off mood, act as a tailwind for the safe-haven buck and drive flows away from the risk-sensitive aussie.

Looking at the broader picture, the AUD/USD pair has been oscillating in a narrow trading band over the past two weeks or so. The range-bound price action constitutes the formation of a rectangle and points to indecision over the next leg of a directional move. Given a sharp fall from the August swing high, this could be categorized as a bearish consolidation phase.

Furthermore, technical indicators on the daily chart - though have been recovering from lower levels - are still holding in the bearish territory. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside. Hence, a subsequent fall towards the trading range support, around the 0.6400 mark, remains a distinct possibility.

Some follow-through selling will expose the YTD low, around the 0.6365 region touched in September. A convincing break below the latter will be seen as a fresh trigger for bearish traders and pave the way for an extension of the downward trajectory. The AUD/USD pair could then drop towards challenging the next relevant support near the 0.6300 round-figure mark.

On the flip side, the 0.6500 psychological mark now seems to act as an immediate hurdle ahead of the 0.6530-0.6540 supply zone. Sustained strength beyond will negate the bearish bias and set the stage for some meaningful appreciating move in the near term. The AUD/USD pair might then aim to reclaim the 0.6600 round-figure mark and test the 0.6620-0.6625 resistance zone.

AUD/USD 4-hour chart

Key levels to watch