AUD/USD battles 0.6900 after rejection at 50 DMA

• AUD/USD remains pressured amid growing recession fears.
• Expectations of a 75 bps RBA rate hike could rise on hotter Australian inflation.
• The aussie remains capped between 21 and 50 DMAs, as Fed remains in focus.

AUD/USD is consolidating the rebound from near the 0.6880 region, although remains under pressure amid broad risk-aversion.

Investors fret over a probable recession worldwide, as major central banks pledge to bring inflation under control by delivering bigger rate hikes.

Growing economic slowdown concerns offset 75 bps RBA rate hike expectations that could be ramped up should this week’s Australian inflation data come in hotter than expected.

Traders also await the much-awaited Fed rate hike decision for fresh dollar valuations. In the meantime, the aussie digest the comments from Prime Minister Anthony Albanese, as he requested China to remove its trade sanctions against Australia, in an effort to repair the fractured relationship.

From a short-term technical perspective, AUD/USD is retreating from monthly highs after running into a major 50-Daily Moving Averages (DMA) resistance at 0.6975 last Friday.

Bears now target the horizontal 21 DMA at 0.6845 should the daily low of 0.6879 give way.

The 14-day Relative Strength Index (RSI) is turning south to attack the midline, justifying the renewed downside.

AUD/USD: Daily chart

If the 21 DMA is taken out on a sustained basis, then a drop towards 0.6800 cannot be ruled out.

Further south, the July 18 low of 0.6787 will be put to test by AUD sellers.

AUD/USD: Additional levels to consider