**Australian Dollar in Focus: Short-Term AUD/USD Outlook as Recovery Reaches Resistance**
Based on analysis by Richard Snow (original content at forex.com), with additional insight from current market commentary.
### Introduction
The Australian dollar (AUD) has experienced a period of recovery against the US dollar (USD), capturing market attention as it reached a significant resistance level. Recent policy updates and macroeconomic data have influenced the AUD/USD currency pair, with lingering uncertainty about the Australian economic outlook and potential shifts in US Federal Reserve policy. This article examines the short-term outlook for AUD/USD, the technical landscape, and the broader factors influencing the pair, drawing from Richard Snow’s analysis and supporting data from additional market sources.
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### Macroeconomic Backdrop
**1. Australian Monetary Policy Update**
– The Reserve Bank of Australia (RBA) has maintained a stance that can be described as data-dependent, staying cautious about further tightening, but not ruling out future rate hikes.
– At its recent meeting, the RBA held the cash rate at 4.35 percent, emphasizing the need for higher rates “for longer” if inflation proves persistent.
– Australian inflation remains above the RBA’s target band, and the central bank has signaled that inflation risks are still “broadly balanced,” keeping traders focused on upcoming consumer price index (CPI) releases.
– Wage growth, robust labor market figures, and a slower-than-anticipated decline in inflation support the RBA’s cautious approach.
**2. US Federal Reserve Policy and Dollar Outlook**
– In the United States, the Federal Reserve has signaled patience in cutting rates, with policymakers indicating that a rate-cutting cycle is not yet imminent.
– US economic data, including better-than-expected non-farm payrolls and persistently strong consumer spending, have underpinned US dollar strength.
– However, speculation about the timing and extent of future rate cuts by the Fed injects volatility into USD pairs.
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### Recent Performance of AUD/USD
**1. Recovery from Lows**
– After testing multi-month lows earlier in the year, AUD/USD has staged a modest recovery.
– The rebound was supported by a series of better-than-expected Australian labor market data and resilient commodity prices, especially for iron ore and coal, which are critical to Australia’s export sector.
– The pair has struggled to advance further as it reaches notable resistance near the 0.6700 zone.
**2. Short-Term Resistance and Support**
– According to Richard Snow’s technical analysis, the AUD/USD pair is currently encountering overhead resistance, a recurring obstacle preventing further upward movement.
– Key resistance levels are identified around 0.6700 and 0.6725, near the 200-day simple moving average (SMA).
– On the downside, support is seen at 0.6620, followed by a more substantial level at 0.6570, which has historically acted as a floor.
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### Technical Analysis: Key Levels and Chart
Read more on AUD/USD trading.