# AUD/USD Rebounds Sharply: Technical Breakthrough Following Recent Declines
*Inspired by the reporting of Adam Button at Forexlive, with additional market context and analysis.*
## Introduction
The Australian dollar (AUD) staged an impressive turnaround in its latest trading session versus the US dollar (USD), completely reversing its earlier losses and breaking through a key level of technical resistance. This resurgence came after a turbulent day in the currency markets, with AUD/USD initially struggling due to factors including mixed economic data and shifting global risk sentiment. This article examines the details behind the AUD/USD’s sharp rebound, its technical implications, the prevailing drivers influencing the currency pair, and what traders should consider going forward.
## Overview of the Day’s Price Action
– **Early Trading Cycle:** At the beginning of the session, the AUD/USD pair slipped, with traders responding to cautious risk sentiment and uncertainty around the Federal Reserve’s policy outlook.
– **Turnaround:** As the session progressed, the pair found strong support, ultimately rallying to erase all prior losses and finish the day higher.
– **Technical Breakthrough:** Importantly, the AUD/USD moved above an established area of technical resistance, signifying renewed bullish momentum.
## Key Developments and Price Levels
– **Initial Decline:** The Australian dollar opened the session on the back foot, pressured by:
– Tepid economic releases from China, Australia’s main trading partner.
– Strength in the US dollar, supported by hawkish comments from key Federal Reserve officials and solid US economic data.
– **Support Found:** The pair found support near the 0.6650 level, an area coinciding with its 100-hour simple moving average, which often acts as a magnet for price action.
– **Subsequent Rally:** Buyers stepped in aggressively, pushing AUD/USD above the 0.6690-0.6700 range—the technical ceiling that had capped price action in previous sessions.
– **Breakout Confirmation:** A sustained move and close above the 0.6700 level confirmed the breakout, setting up potential for further gains on future sessions.
## Technical Analysis
### Moving Averages and Resistance Levels
– The 100-hour moving average provided initial support, marking the low of the session before the pair bounced.
– The 200-hour moving average, previously viewed as a hurdle around the 0.6690 area, was convincingly surpassed.
– Breaking through the resistance at 0.6700 opened the door for movement toward the next resistance levels, identified at 0.6730 and 0.6800.
### Chart Patterns
– A textbook “snapback” reversal occurred after the initial sell-off, which technical traders often interpret as a change in short-term sentiment.
– The decisive breach of resistance signals a shift in trader positioning, with stop orders above resistance likely fueling the rally.
### Support/Resistance Levels to Watch
– **Near-term support:** 0.6700-0.6690 (previous
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