**AUD/USD Weekly Technical Overview and Outlook**
*Based on analysis originally by ActionForex.com. Supplemented with relevant information and market insights.*
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### Market Summary
The AUD/USD currency pair displayed considerable volatility throughout the past week. The fluctuations primarily stemmed from shifting risk sentiment in the financial markets, movements in U.S. Treasury yields, as well as evolving expectations around the monetary policy approaches by both the Reserve Bank of Australia (RBA) and the U.S. Federal Reserve (Fed).
Although the Australian dollar managed to mount a mild recovery, the overall tone remained cautious. The greenback found intermittent support via safe-haven flows and better-than-expected U.S. macroeconomic data. This emitted a notable influence on the pair’s direction. Given these factors, traders are keenly watching technical levels and upcoming catalysts that might determine the next major trend for AUD/USD.
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### Weekly Performance Review
– AUD/USD staged a recovery early in the week, bouncing from the previous lows near 0.6570, only to struggle for momentum above the 0.6700 handle.
– The U.S. dollar strength resurged mid-week, weighing the pair down, especially after robust U.S. jobless claims data and hawkish Fed commentary.
– By the end of the week, AUD/USD settled near 0.6640, showing a net minimal gain over the five-day period. The price action reflected uncertainty, with neither bulls nor bears taking decisive control.
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### Key Drivers for AUD/USD
#### 1. Federal Reserve Policy Outlook
The Federal Reserve remains a pivotal influence on the AUD/USD pair. Markets continue to recalibrate expectations concerning the timing and magnitude of potential U.S. rate cuts. While inflation showed signs of easing, persistently strong labor market data and hawkish remarks from Fed officials have delayed expectations for any imminent rate reduction.
– The U.S. Consumer Price Index (CPI) and upcoming Non-Farm Payrolls (NFP) releases are likely to shape the short- to medium-term trend.
– Positive U.S. surprises tend to strengthen the dollar, applying downward pressure on AUD/USD.
#### 2. Reserve Bank of Australia Stance
The Reserve Bank of Australia’s approach is currently more data-dependent, considering both subdued domestic inflation and deteriorating growth signals.
– Traders are watching local employment figures and inflation data for clues on whether the RBA might hold or deliver another rate hike.
– Any surprise move from the RBA generally sparks increased volatility in AUD crosses.
#### 3. Commodity Prices and China’s Economic Health
As a commodity currency, the Australian dollar is particularly sensitive to global raw material prices, especially iron ore and gold. The state of China’s economy, being Australia’s major trading partner, also plays a critical role.
– Strong Chinese manufacturing or stimulus measures typically buoy AUD/USD.
– Soft growth or disappointing data from China often dampens demand for the Australian dollar.
#### 4. Risk Sentiment & Broader Market
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