**Australian Dollar Retreats from August Highs: In-Depth Technical Analysis**
Original insights based on analysis by ActionForex.com
The Australian Dollar (AUD) has recently shown significant movement in the forex markets, retreating from its notable highs reached in August. This article offers a comprehensive technical analysis of the AUD’s current position, potential price trajectories, and the key economic events influencing its price action. Supplementing the original insights from ActionForex.com, we incorporate up-to-date research and additional perspectives to paint a clear picture of what traders and investors might expect in the near term.
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## Overview of Current AUD Performance
– **Sharp Retreat from August Highs**: The AUD/USD currency pair surged to its highest levels in August 2023, catalyzed by positive risk sentiment and commodity prices. Since then, the pair has pulled back, with sellers regaining control.
– **Contributing Factors**: A variety of macroeconomic factors are impacting AUD performance, including shifting interest rate expectations, global risk sentiment, and changes in commodity markets, most notably iron ore, which is a key Australian export.
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## Technical Chart Analysis
### 1. **August Highs and Reversal**
– The pair peaked at levels not seen in several months, reflecting a short-term bullish run.
– After touching this resistance, AUD/USD faced strong selling pressure, signaling that traders are locking in profits or anticipating economic changes.
### 2. **Support and Resistance Levels**
– **Resistance:** The major resistance level was established at the recent highs, failing to break through.
– If the market rallies again, traders are eyeing these levels for potential reversals.
– A decisive break above this resistance could open the way for further upside.
– **Support:** Initial support is now seen at key psychological and technical levels, around 0.6600, 0.6550, and then 0.6500.
– The failure to hold above 0.6550 could trigger further declines.
– Further support may be found at 0.6450 and then at year-to-date lows near the 0.6400 region.
### 3. **Trendlines and Moving Averages**
– The pair stayed above its 50-day moving average during the initial August rally.
– The recent pullback brought the AUD underneath both the 20-day and 50-day moving averages, hinting at a bearish-tinged consolidation.
– Longer-term charts reveal a lingering downtrend since the highs of 2021, placing pressure on attempts at sustained rallies.
### 4. **Momentum Indicators**
– **Relative Strength Index (RSI):** The RSI for AUD/USD recently moved out of overbought territory, now hovering near neutral, which suggests momentum is waning.
– **MACD (Moving Average Convergence Divergence):** The MACD histogram is descending, indicating a potential crossover and further weakness in the pair.
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## Macroeconomic Backdrop
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