AUDUSD is in pullback mode from its selloff, as price is retreating from the lows around .7000 and closing in on the 38.2% Fib. This lines up with a former support zone that might hold as resistance.

In addition, the area of interest lines up with the .7200 major psychological mark where more sellers might hop in. A larger correction could reach the 50% level at .7270 or the 61.8% Fib near the 100 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse.

RSI just turned higher from the oversold region, though, suggesting that buyers are taking over. Stochastic is also on the move up and has room to climb before reflecting overbought conditions, so a larger pullback might follow. Turning back down would confirm that sellers are returning and could take AUDUSD back down to the swing low or lower.

The FOMC decision might be a big catalyst for the US dollar midweek, as the Fed is due to print its updated economic projections and dot plot forecasts. Any major changes could push risk sentiment around as well, especially with policymakers expected to weigh the repercussions of the Omicron variant versus strong inflation.

Earlier in the week, the Chinese retail sales and industrial production figures are lined up, and these might impact overall market sentiment and demand for commodity currencies.

The Australian dollar might also take cues from the jobs release around the middle of the week, as a rebound in hiring is eyed. After losing 46.3K positions in October, a strong increase of 200K is eyed for November. Stronger than expected results might buoy the Aussie even higher while a disappointing result could allow the selloff to resume.