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AUD/USD is trading lower after failing to hold above the 0.6600 psychological level, slipping back toward support following a sharp rejection at the recent high of 0.6625.

The pair is now retreating within a well-defined ascending wedge with momentum tilting to the downside.

The AUD/USD pair is under pressure on Monday, trading back below the 0.6600 handle as the US Dollar strengthens.

After touching a year-to-date high at 0.6625 last Thursday, the Aussie has retreated, with profit-taking and broader risk aversion contributing to the pullback.

Markets are also digesting cautious commentary from Federal Reserve (Fed) officials ahead of the Federal Open Market Committee's (FOMC) decision on Wednesday. While no rate change is expected, the Fed is likely to reiterate a “higher for longer” stance, supporting the USD.

AUD/USD daily chart

(Click on image to enlarge)

AUD/USD rejected wedge resistance at 0.6625, forming a long upper wick before slipping back below the 0.6600 psychological level. The pair is now testing support at 0.6550, with further downside targets at the 50-day SMA (0.6508) and July swing low (0.6454).

A break of the wedge base near 0.6372 would signal a bearish reversal.

The Relative Strength Index (RSI) has turned lower, currently near 53, signaling weakening but neutral momentum. Resistance stands at 0.6600, then 0.6625, with the November high at 0.6687 as a longer-term level to watch.

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