**AUD/USD Strengthens Above 0.6700: Market Watch as Traders Await Key US Data**
*Original reporting by FXStreet.com, contributed by additional research.*
**Introduction**
The AUD/USD currency pair, representing the Australian dollar against the US dollar, has seen considerable price momentum as it climbed above the critical 0.6700 mark. This recent push higher is of significant interest to traders and investors ahead of the release of major US economic indicators. Movement in the AUD/USD pair is often shaped by factors such as monetary policy expectations, commodity prices, and broader risk sentiment, in addition to scheduled data releases from both Australia and the United States.
**Overview of Recent Price Action**
– The AUD/USD pair recently broke through resistance at 0.6700, signaling underlying strength in the Australian dollar.
– Market participants are closely watching as the pair attempts to build on these gains, trading above short-term moving averages.
– The Australian currency has been supported by risk-on sentiment, which tends to benefit high-yielding and commodity-linked currencies such as the Aussie.
**Drivers Behind AUD/USD’s Strength**
*Risk Appetite*
– Positive market sentiment globally has favored currencies like the AUD, seen as proxies for growth and risk.
– Stocks have rallied in recent sessions, reducing demand for safe havens like the US dollar.
*Commodity Prices*
– The Australian economy relies heavily on its commodities exports, particularly iron ore, coal, and agricultural goods.
– Stable or rising commodities prices tend to support the Australian dollar.
– Recent stability in these markets, as well as ongoing demand from China and other Asian economies, have helped underpin AUD demand.
*US Dollar Softness*
– The US dollar has lost some ground as cooling inflation and expectations of less aggressive tightening from the Federal Reserve weigh on the greenback.
– The DXY Dollar Index has retreated in recent sessions as investors reassess the Fed’s likely policy path.
**Upcoming US Data and Its Potential Impact**
Traders are now focused on upcoming US data releases, which are likely to add volatility to the AUD/USD pair:
*Key Data Releases Include:*
– **US Nonfarm Payrolls:** The employment report, to be released on Friday, is a key barometer of the US labor market’s health. Strong employment numbers typically support the US dollar, while weaker data may pressure it.
– **ISM Service PMI:** As a leading indicator of economic activity in the services sector, this reading can sway the US dollar depending on how it compares to market expectations.
– **US Inflation Reports:** While not immediately due, traders are positioning ahead of future core inflation prints, which can influence Federal Reserve decisions, thus impacting USD.
– **Australian Data:** Investors are also attentive to updates on Australian retail sales, trade balance, and labor market conditions, all of which can affect expectations for Reserve Bank of Australia (RBA) policy.
**Technical Analysis Overview**
*A look at the technicals shows:*
– **Immediate Support:** Located around
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