**AUD/USD Technical Analysis: Key Levels and Market Outlook**
*Based on original insights by Greg Michalowski at InvestingLive.com. Supplemented with additional market research and recent data.*
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## Introduction
The AUD/USD currency pair, representing the Australian dollar against the United States dollar, is a favorite among forex traders due to its liquidity, volatility, and its reflection of macroeconomic trends in both Australia and the United States. The pair often responds to changes in risk sentiment, commodity prices, and central bank policies. As we move through the second quarter of 2024, AUD/USD traders face an environment marked by global economic uncertainty, fluctuating commodity prices, and divergent monetary policies. This article presents a detailed technical analysis of AUD/USD, highlighting essential support and resistance levels, trend dynamics, and what to watch in the coming sessions.
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## Current Market Context
The Australian dollar often correlates closely with risk appetite and the price of commodities, particularly iron ore and coal, which are Australia’s major exports. Against this backdrop, recent economic data and events impacting the Australian and US economies have played pivotal roles:
– The Reserve Bank of Australia (RBA) has maintained a neutral to slightly hawkish stance in recent months, hinting at possible tightening depending on inflationary pressures.
– The Federal Reserve in the United States remains vigilant regarding inflation, creating potential for interest rate hikes or at least extended high rates.
– Global sentiment has swung between risk-on and risk-off mode, impacting commodity currencies like the AUD.
– Chinese economic performance, a significant factor for Australian exports, remains a key driver.
With these factors in play, currency traders closely monitor technical indicators on AUD/USD to find actionable trade setups.
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## Technical Overview and Recent Price Action
In his analysis, Greg Michalowski emphasizes the importance of mapping out key levels to provide a framework for AUD/USD trading strategies. Here, we break down these levels and supplement them with recent action.
### Trend Analysis
– **Daily Chart Perspective:**
AUD/USD has generally been in a downward trend since mid-2021, reflective of broader USD strength and global risk aversion. However, in recent months, price action has suggested a base may be forming, with a series of higher lows on the daily chart indicating potential exhaustion of selling pressure.
– **Short-Term Movements:**
Recent sessions have shown the pair oscillating within a range, suggesting market indecision. Breakouts from this area could signal the next major move.
### Key Support Levels
Technical support areas provide potential buy zones and stop-loss levels for bearish trades. According to Michalowski and additional chart analysis, the following are critical:
– **0.6520 – 0.6530:**
This zone has provided a floor for prices several times in recent weeks. Strong buying activity has been observed here, marking it as the primary short-term support.
– **0.6480:**
Serving as the next line of defense, a breakdown below
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