**AUD/USD Weekly Analysis and Outlook**
*Based on insights from Action Forex and enhanced with additional industry analysis*
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### Overview
The AUD/USD currency pair has shown significant movement in recent weeks, driven largely by global economic factors, shifts in central bank policy expectations, and fluctuating risk sentiment. This detailed outlook examines recent price action, current technical positioning, and the key fundamental factors influencing the Australian Dollar and US Dollar. Both short-term traders and long-haul investors will find this analysis useful for navigating the evolving forex landscape.
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### Recent Performance Review
**Action Forex notes:**
– The AUD/USD pair started the week with a notable rally, breaking above short-term resistance levels before hitting a temporary ceiling.
– Despite upward movement, momentum faltered as the pair approached the 0.6700 handle, facing supply pressure from sellers protecting this resistance.
– The pair ultimately closed the week modestly higher, holding onto recent gains but lacking a clear bullish continuation.
**Key Recent Factors:**
– Dovish tone from the US Federal Reserve regarding the pace of future rate hikes lent some support to risk-sensitive currencies like the Australian Dollar.
– Stronger commodity prices, particularly in iron ore (one of Australia’s largest exports), provided underlying support for the AUD.
– U.S. economic data releases, including labor market readings and consumer sentiment, continued to shift expectations for Federal Reserve policy.
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### Fundamental Drivers
**1. Commodities & Australia’s Economy**
– Australia is highly leveraged to the prices of commodities, notably iron ore, coal, and gold.
– Recent stabilization and moderate increases in these commodities have helped underpin the AUD, counteracting some domestic economic softness.
– Chinese demand remains a key variable; any recovery in Chinese industrial activity tends to benefit the Australian Dollar due to tight economic linkages.
**2. Central Bank Policy Divergence**
– The Reserve Bank of Australia (RBA) has kept rates steady amid persistent, but not accelerating, inflation and sluggish domestic growth.
– In contrast, the US Federal Reserve has shifted to a data-dependent, less hawkish stance, suggesting the end of its hiking cycle is near or already reached.
– Forward-rate expectations now show markets pricing in possible rate cuts by the Fed later this year, moderating USD strength.
**3. Global Risk Sentiment**
– The Australian Dollar behaves as a classic “risk-on” currency, strengthening when global equities and assets rally.
– Renewed optimism in equity markets and a partial resolution to geopolitical tensions (for example, in the US-China trade relationship) tend to favor higher AUD/USD.
– Conversely, any spike in global uncertainty or a sharp selloff in risk assets may cap the AUD’s potential gains against the dollar.
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### Technical Analysis
#### Short-Term Chart Patterns
– **Daily Chart:**
– Recent sessions have printed a series of higher lows, indicating persistent buying interest.
– Overhead resistance remains firm near 0.6700-0.6720, with multiple
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