**AUD/USD Continues to Climb, But Bearish Risks Remain
Original Reporting by EconoTimes FXWirePro Editorial Team**
—
The Australian dollar (AUD) has shown upward momentum against the US dollar (USD) in recent sessions. Despite this strengthening, the broader outlook for the currency pair remains clouded by persistent bearish factors. FXWirePro at EconoTimes provided an analysis of these movements, presenting a cautious view for traders and investors observing the AUD/USD cross. This article will explore the recent price action, technical indicators, macroeconomic fundamentals, and key risks that inform the current and future trajectory of AUD/USD. Supplemental insights from recent market analysis and central bank updates offer additional context for readers seeking to understand the forces shaping this major currency pair.
—
### Recent Price Action and Technical Analysis
– **Short-Term Upside:**
The AUD/USD pair edged higher in the last session, benefiting from renewed appetite for risk-sensitive assets. The Australian dollar advanced to near-term highs, reflecting improved sentiment and a weaker US dollar.
– **Resistance and Support Levels:**
– Immediate resistance is seen around the 0.6650 level. A decisive break above this could see the pair test higher, but strong selling interest remains present.
– Initial support lies near the 0.6600 mark, with further downside potential toward the 0.6550 zone if selling pressure intensifies.
– **Trend Indicators:**
Short-term moving averages present a mixed picture. The 21 and 50-period moving averages show price oscillating close to their levels, highlighting a lack of clear direction.
Technical momentum indicators, such as the Relative Strength Index (RSI), suggest some recovery from oversold conditions but are not yet in strong bullish territory.
—
### Broader Bearish Outlook
Despite recent gains, several factors maintain a bearish shadow over the AUD/USD pair:
#### 1. **Divergence in Economic Policy**
– **Federal Reserve Policy**
– The US Federal Reserve has signaled a cautious stance, with the possibility of maintaining elevated interest rates for an extended period in 2024.
– Sticky US inflation and resilient labor market data have reinforced market expectations that US rates will not be cut aggressively.
– **Reserve Bank of Australia Policy**
– In contrast, the Reserve Bank of Australia (RBA) has maintained a relatively dovish tone in recent meetings, emphasizing weak wage growth and moderate inflation.
– Markets are now pricing in a greater likelihood that the RBA’s next move could be a rate cut, or at least a prolonged hold, limiting upside for the AUD.
#### 2. **Economic Data Disparity**
The Australian economy is showing signs of strain. Recent macroeconomic releases indicate:
– Modest GDP growth, indicating consumer and business caution.
– Unemployment has ticked up, although still below long-term averages.
– Retail sales and business confidence indices have stagnated, reflecting subdued domestic demand
Read more on AUD/USD trading.