AUD/USD Price Analysis: Drops nearly 30 pips from session highs

• AUD/USD pulls back from session highs, confirming a bearish divergence of RSI. 
• The pair risks a deeper drop to the 50-hour SMA support. 

AUD/USD has failed to take out resistance at 0.70 ahead of the all-important Reserve Bank of Australia (RBA) interest rate decision. The pair is currently trading near 0.6970, having hit highs above 0.70 two hours ago. 

The pullback has established a bearish divergence of the relative strength index (RSI) on the hourly chart. A bearish divergence occurs when the indicator prints lower highs alongside higher highs on the price chart and is widely considered a sign of uptrend exhaustion. 

As such, one may expect a deeper drop in the AUD/USD, possibly to the ascending 50-hour simple moving average (SMA), currently at 0.6955. On the higher side, a clear break above 0.70 would restore the intraday bullish view.

The AUD/USD pair has rallied by over 1500 pips over the past 3.5-months. The RBA, therefore, may talk down the Aussie dollar. The rate decision is scheduled at 04:30 GMT. 

Hourly chart

Trend: Bearish

Technical levels