**AUD/USD Weekly Analysis and Technical Outlook (Adapted from Action Forex and Expanded)**
**Overview of Recent Price Movements**
The AUD/USD pair experienced yet another week of volatile trading, reflecting ongoing macroeconomic and geopolitical developments that continue to influence the global foreign exchange landscape. Recently, the pair has shown signs of both resilience and vulnerability, with market participants closely monitoring key levels for signs of a sustained directional move.
Throughout the last week, AUD/USD attempted to build on the upward momentum established in preceding sessions. However, repeated attempts to break higher encountered significant resistance near the 0.6700 area—a level that has historically acted as a barrier. Despite several rallies, the pair struggled to generate enough follow-through buying to signal a medium-term bullish reversal.
**Summary of Weekly Trading Action**
– The pair posted a notable advance early in the week, buoyed by improved risk sentiment and positive domestic Australian data.
– The rally, however, stalled midweek, as concerns about U.S. inflation and Federal Reserve monetary policy resurfaced.
– Subsequent price action was characterized by choppy movement, with AUD/USD alternating between short-term recoveries and pullbacks.
– Ultimately, the pair ended the week little changed, closing just below the psychological 0.6700 mark.
**Technical Analysis**
*Support and Resistance Levels*
Identifying key support and resistance zones is crucial for traders aiming to navigate AUD/USD’s volatile swings. As observed in recent sessions:
– **Immediate resistance**: The 0.6700 psychological mark remains the foremost upside barrier. A break and close above this level could open further gains toward the next resistance at 0.6817, which represents the yearly high.
– **Intermediate resistance**: Should bullish momentum accelerate, the pair could aim for the longer-term resistance at 0.6870—tied to the 61.8% Fibonacci retracement level from the February high to May low.
On the downside:
– **Direct support**: 0.6586 has emerged as the first line of defense, corresponding to the late May swing low. Breaching this could lead to a test of 0.6462, followed by the crucial support zone around 0.6362, which marks the May trend low.
*Trend and Momentum Indicators*
Technical studies suggest the AUD/USD pair is at a pivotal juncture:
– The 20-day and 50-day moving averages are beginning to converge, indicating indecision and a potential inflection point. Sustained price action above these averages would reinforce bullish momentum.
– The Relative Strength Index (RSI) on the daily chart is hovering in neutral territory, reflecting the pair’s lack of decisive direction in the near term. However, any move above 60 could be viewed as a bullish signal.
**Fundamental Factors Shaping AUD/USD**
The fundamental backdrop for AUD/USD remains mixed, as traders weigh a range of domestic and global drivers.
*Australian Economic Developments*
– The Reserve Bank of Australia
Read more on AUD/USD trading.