**Australian Dollar Short-Term Outlook: AUD/USD Bulls Eye Breakout**
*Based on the work of Matt Weller at FOREX.com and additional analysis.*
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## Overview
The Australian Dollar (AUD) has displayed significant momentum in recent sessions, hinting at a potential bullish breakout against the US Dollar (USD). Following a period of constrained volatility and consolidation, AUD/USD has started to draw interest from traders betting on a directional move. This article examines the short-term technical and fundamental outlook for AUD/USD, discusses key drivers influencing the pair, and considers the broader macroeconomic picture, leveraging insights from Matt Weller’s original analysis for FOREX.com, with supplementary context throughout.
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## Recent AUD/USD Performance
AUD/USD has traded within a moderately narrow range over the past few weeks but has recently shown tentative signs of strength. The pair continues to respond dynamically to both domestic economic data from Australia and wider macroeconomic influences, chiefly those associated with US monetary policy.
### Key Highlights
– AUD/USD has climbed off its recent lows, testing resistance levels and challenging technical ceilings established earlier in the year.
– The currency pair has shrugged off some near-term weakness as risk appetite has improved globally.
– Market attention remains firmly fixed on upcoming releases from both Australian and US central banks.
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## Technical Analysis
The technical outlook for AUD/USD has evolved as buyers test the upper bounds of the current trading range. Chart patterns and momentum indicators are aligning in favor of a potential bullish breakout.
### Trend and Chart Patterns
– **Ascending Triangle Formation**: The pair has carved an ascending triangle pattern on the daily chart. This bullish formation arises when higher swing lows converge under a horizontal resistance level, indicating growing accumulation by buyers.
– **Resistance Levels**: The primary resistance zone is around 0.6750 to 0.6800. A clear break above this band could catalyze further buying interest.
– **Support Levels**: On the downside, the 0.6600 region has acted as reliable support, marking the floor for the pair during recent corrective moves.
### Momentum Indicators
– **Relative Strength Index (RSI)**: RSI readings remain above the neutral 50 mark, signaling that bullish momentum is still present, though not yet overextended.
– **Moving Averages**: The 50-day and 200-day moving averages are converging near recent price action, suggesting a potential inflection point.
### Price Action Scenarios
– **Bullish Case**:
– Sustained price action above 0.6800 would open the way for a rally towards 0.6900 and beyond. This would confirm the completion of the ascending triangle, emboldening trend-following traders.
– **Bearish Case**:
– Failure to breach the upper resistance and a reversal below 0.6600 could see the pair retest the 0.6500 region or lower, invalidating the bullish setup.
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## Fundamental Factors
Fundamental drivers play a key
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