**AUD/USD Price Outlook: Prolonged Consolidation Expected**
*Original analysis credit: Pablo Piovano, FXStreet*
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The AUD/USD currency pair has recently attracted attention due to its mild uptrend, yet increasing indications suggest that the pair may enter an extended period of consolidation in the near term. This outlook arises from a complex combination of technical signals, macroeconomic influences, and shifting trader sentiment. With the global forex landscape facing heightened uncertainty, the Australian dollar’s trajectory against the US dollar is shaped by both domestic and international variables. This article provides an in-depth analysis of recent price action, the forces guiding AUD/USD, and the potential scenarios ahead.
## Recent Price Action and Technical Overview
After finding a stable base near the 0.6600-0.6610 range, AUD/USD has experienced a gradual rebound, currently pushing against significant resistance marks. Despite sporadic attempts to break higher, momentum remains capped.
**Key Technical Observations:**
– The pair’s short-term lows have become more elevated, forming a series of higher lows, suggesting underlying support.
– Resistance near the 0.6700 and 0.6720 levels has proven difficult to surpass, creating a horizontal range for the pair.
– The Relative Strength Index (RSI) on daily charts fluctuates around mid-levels, reflecting indecision and lack of directional vigor.
– Moving averages (notably the 20- and 50-day simple moving averages) have converged, reinforcing a neutral bias and indicating a phase of balance between buyers and sellers.
– Breakouts attempted above 0.6725 have been repeatedly rejected, signaling entrenched resistance from sellers at those levels.
These technical factors point toward a likely continuation of range-bound movement, with neither bulls nor bears demonstrating enough conviction to break the current impasse.
## Macro Drivers Dictating the AUD/USD
Beyond chart dynamics, several economic factors influence the current consolidation narrative for AUD/USD:
### 1. Diverging Central Bank Policies
– **US Federal Reserve:** Recent US economic data points to a resilient labor market and ongoing inflation concerns. As a result, the Federal Reserve has maintained a cautious approach, keeping markets guessing on the timing and magnitude of future rate cuts.
– **Reserve Bank of Australia (RBA):** The RBA’s monetary policy has shifted towards a more neutral to dovish stance, citing easing domestic inflation pressures and a slowdown in consumer spending.
– These contrasting stances have narrowed the policy gap, reducing directional momentum in AUD/USD.
### 2. Commodity Price Fluctuations
– The Australian dollar remains closely linked to global commodity prices, especially iron ore and energy exports.
– Softening Chinese demand for key Australian exports has weighed on the AUD, while any rebound in commodity prices could provide support.
– Ongoing trade negotiations between China and major partners continue to inject volatility and uncertainty.
### 3. Global Risk Appetite
– The AUD is widely viewed as a risk-sensitive currency. Fluctu
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