**Australian Dollar Technical Outlook: AUD/USD, AUD/NZD, and AUD/JPY Setups**
*Adapted from Michael Boutros, Forex Factory, with added data and insights.*
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### Introduction
The Australian Dollar (AUD) sits at a crossroads this week, navigating rippling effects from global risk sentiment, Chinese economic shifts, and evolving monetary policy guidance from the Reserve Bank of Australia (RBA). As external and internal pressures combine, traders are watching key cross pairs like AUD/USD, AUD/NZD, and AUD/JPY for opportunities. This article delves deep into the technical setups of these pairs, expanding on original analysis by Michael Boutros with additional information to contextualize near-term price processes.
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### Factors Affecting the Australian Dollar
To understand the AUD’s price action, it’s essential to contextualize current drivers:
**Global Risk Sentiment**
– AUD often acts as a proxy for China-related trades, being heavily influenced by commodity flows and emerging market sentiment.
– Global equity performance and risk-on/risk-off moves continue to sway the AUD, with periods of uncertainty generally triggering demand for safe havens at the expense of the AUD.
**Chinese Economic Data**
– China’s stimulus policies, property market indicators, and overall GDP performance play a significant role in determining the momentum of the AUD.
– Strong Chinese PMI data or better-than-expected Chinese imports often correlate with rallies in the Australian Dollar.
**Monetary Policy Divergence**
– The RBA’s stance contrasts notably with the US Federal Reserve and Bank of Japan, creating variable interest rate differentials that directly influence AUD/USD and AUD/JPY.
– The RBA’s latest meeting minutes confirmed some uncertainty about the inflation trajectory, with policymakers keen to keep their options open. Any dovish or hawkish tilt can send ripples through the currency’s crosses.
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### AUD/USD Technical Analysis
Despite being fundamentally exposed to the same macro factors, the AUD/USD pair is showing a classic sign of technical exhaustion near major structural support, pointing toward a possible reversal.
**Key Technical Levels**
– *Long-term Support*: The 0.6580 area served as a critical support level over the past six months. This range has absorbed several downside attempts, marking it as a battleground between bulls and bears.
– *Fibonacci Support*: 0.6580 also aligns with the 38.2% Fibonacci retracement from the October to December rally.
– *Downtrend Resistance*: Resistance zones can be found at 0.6670, the March swing high, and at 0.6730, aligning with a former support-turned-resistance from earlier in the year.
**Daily Chart Signals**
– Late June saw aggressive selling pressure drive the pair toward oversold conditions on the daily RSI, with price action forming a potential bullish reversal candle pattern just above support.
– A bullish divergence on RSI (where price made lower lows but RSI made higher lows) hints at waning bearish momentum and an opportunity for tactical
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