**AUD/USD Breaks Below 100-Hour Moving Average, Trades Near 0.6697**
*Based on materials by Crispus Nyaga of FXDailyReport, supplemented with additional market analysis.*
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The Australian dollar (AUD) slipped against the US dollar (USD) in the latest trading session, with the pair dropping below its 100-hour moving average (MA) level and trading around 0.6697. This recent slide underscores persisting headwinds for the Australian currency and reflects the intertwined effects of shifting risk sentiment, changing commodity prices, and evolving expectations regarding central bank policies.
**Key Technical Developments**
– The AUD/USD slipped under the 100-hour MA, marking a shift in the pair’s immediate technical landscape.
– This key support had held in recent sessions, but the break lower opens the door to further bearish activity in the short term.
– Following the breach, the pair hovered close to the 0.6697 level by the close of the session, a notable drop from prior highs near 0.6727.
**What Does the 100-Hour Moving Average Signal?**
The 100-hour MA is an important indicator for short-term and swing traders, often viewed as a dynamic support or resistance level. Sustained trading above this line generally encourages bullish sentiment, while a break below can signal a shift toward bearish momentum.
– The breach suggests sellers are regaining control in the near term.
– Traders will closely watch for a follow-through below other support levels to confirm a deeper downside move.
**Macro Backdrop and Market Sentiment**
Several factors are converging to pressure the Australian dollar and bolster the US dollar:
1. **US Dollar Strength**
– The US dollar has remained resilient, benefiting from safe-haven demand and robust US economic data.
– Yields on US Treasury bonds have seen upward movement recently, a result of persistent inflation and the Federal Reserve’s higher-for-longer rate posture.
– Hawkish comments from Federal Reserve officials and a reluctance to cut rates aggressively continue to keep the dollar supported.
– According to the CME FedWatch Tool, market participants now expect any potential rate cut to come later in 2024, rather than imminently.
2. **Economic Data from the US**
– Recent data, including strong non-farm payrolls figures, buoyant retail sales, and upward revisions to first-quarter GDP, have all contributed to investor confidence in the greenback.
– Inflation indices remain above the Fed’s 2 percent target, bolstering the case for holding rates steady in the short term.
3. **Australian Economic Developments**
– The Australian economy has shown resilience amid global slowdown fears, but headwinds are emerging.
– The Reserve Bank of Australia (RBA) left rates unchanged at its last meeting, citing concerns about the potential for renewed inflation.
– Wage growth in Australia ticked higher in the latest quarter, but softer consumer confidence and falling retail sales have
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