**Technical Analysis: Outlook for AUD/USD as It Eyes Further Gains**
*Credit: Adapted from Xiaoai Shen, Futunn News*
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The Australian dollar (AUD) paired with the US dollar (USD) is one of the most actively traded and highly watched currency pairs in the global forex market. The recent movements of the AUD/USD have attracted widespread attention due to shifts in risk sentiment, commodity price dynamics, and the monetary policy stance of both the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed).
This analysis will delve deeply into the AUD/USD’s recent price action, key technical indicators that market participants are tracking, critical resistance and support levels, as well as broader economic factors that could influence this pair’s trajectory in the near-term.
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## The Current Market Landscape
### Recent Performance
– Over recent weeks, AUD/USD has shown a bull trend, recovering from local lows. After testing downside supports, it has rebounded in line with growing risk appetite in financial markets.
– The pair’s push higher has been bolstered by positive data out of Australia and a moderation in the US dollar’s strength amid cooling Fed hawkishness.
– At the time of writing, AUD/USD is trading close to important technical resistance, suggesting the pair could be set for further gains provided that bullish momentum is sustained.
### Key Influences and Drivers
– **Commodity Prices:** As Australia is a significant exporter of iron ore, copper, coal, and other commodities, the AUD is often considered a commodity currency. The ongoing recovery in global commodity prices, especially industrial metals and energy products, provides support to the AUD.
– **Risk Sentiment:** The Australian dollar is typically seen as a risk-sensitive currency. When global investors are optimistic and stocks rally, the AUD often strengthens.
– **Monetary Policy:** Shifts in expectations regarding the RBA’s policy stance or that of the Fed have a direct impact. Currently, the RBA has maintained a cautious tightening bias, while the Fed appears closer to a pause or moderate path in rate hikes.
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## Technical Analysis
### Daily Chart Overview
– The daily chart reveals that after bottoming in late spring, AUD/USD has been carving out higher lows, signaling renewed buying interest.
– Short-term moving averages have started to curl upwards, showing that the underlying trend may be turning positive.
– A critical resistance zone lies just ahead, coinciding with previous swing highs and Fibonacci retracement levels.
#### Key Support and Resistance Levels
– **Major Resistance:**
– 0.6720: The level corresponds with previous local peaks and is reinforced by the 200-day moving average.
– 0.6800: Round number resistance that historically acts as a psychological barrier. A sustained break above may open the door for accelerated gains.
– **Key Support:**
– 0.6580: Recent retracement lows, now serving as immediate support.
– 0.6500: Important round number
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