The Australian dollar is exhibiting a moderate downside bias, extending the corrective momentum from the previous session, which has enabled the AUD/USD pair to retreat from the local highs recorded on 6 May. Market activity is now declining significantly, while traders are taking profits by unwinding long positions in the asset.

During the Asian session, the AUD/USD pair is correcting around 0.7256, as escalating geopolitical tensions in the Middle East are becoming an increasingly important driver of volatility across global commodity and currency markets.

The probability of growth remains.

On the daily timeframe, the development of the third ascending wave of the higher degree (3) has commenced. It already incorporates the third wave of the lower degree iii of 1 of (3), while the corrective phase as the fourth wave iv of 1 of (3) has been completed. On the four-hour time frame, the fifth wave v of 3 is currently forming, while wave (iii) of v is developing. If this scenario proves correct, the AUD/USD pair’s upward trend is expected to continue toward the 0.7420–0.7600 zone with a critical stop loss at 0.7196.

At present, the price is trading near the area of recent local highs at 0.7241. However, mixed dynamics are observed on the four-hour timeframe. In particular, attention should be drawn to the formation of a Bull Pennant pattern, which is expected to resolve to the upside, with a projected target at 0.7486.

The AUD/USD pair is attempting to consolidate above the 0.7244 level, while the Reserve Bank of Australia (RBA) monetary policy outcome remains in focus for traders.

The AUD/USD pair is correcting toward 0.7150 following the Reserve Bank of Australia (RBA) meeting today, at which the interest rate was raised from 4.10% to 4.35%, as expected.