**AUD/USD Rallies Sharply, Reversing Losses and Breaking Technical Resistance**
Original reporting by Eamonn Sheridan, expanded and supplemented with additional analysis.
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The Australian dollar (AUD) made a significant turnaround against the US dollar (USD) during the latest trading session, completely reversing earlier losses to surge past key technical resistance levels. This sudden shift in momentum caught many traders by surprise and raised fresh questions about the near-term outlook for the AUD/USD currency pair.
### Intraday Reversal: What Happened?
During Asian trading hours, the AUD/USD initially succumbed to selling pressure, reflecting a mix of risk aversion in global markets and ongoing concerns over China’s economic performance—factors that often dictate the direction of the Aussie dollar due to Australia’s heavy trade exposure to China. However, the sentiment shifted dramatically as the session progressed.
By mid-morning in London, the pair had not only recovered from the day’s lows but also climbed decisively above several crucial technical barriers, signaling a noteworthy shift in market dynamics.
#### Key Developments in the Session
– **Early Weakness:**
– Persistent risk-off tone globally, driven by geopolitical uncertainties and sluggish Chinese data.
– Renewed worries over global economic growth weighed heavily on commodity-linked currencies like the AUD.
– **Sudden Recovery:**
– Buyers returned with vigor, propelling the AUD/USD higher.
– The pair not only reversed its intraday losses but also took out technical resistance, setting off fresh buying interest and stop-loss triggers.
### Chart Analysis: Technical Levels in Focus
Traders rely on technical analysis to interpret and forecast currency moves. For AUD/USD, several critical levels were observed during the session.
**Key Technical Milestones:**
– **Initial Resistance:**
– The pair faced stiff resistance at the 0.6630 to 0.6640 area, a zone defined by previous session highs and moving average overlays.
– **Breakout:**
– Once the AUD/USD broke above the 0.6630-0.6640 band, additional stop-loss buying kicked in.
– Price action rapidly extended toward 0.6660, another historically significant level posing as resistance.
– **Indicators:**
– The 100-hour and 200-hour moving averages offered dynamic resistance but have now been breached.
– Momentum oscillators shifted from oversold conditions, foreshadowing the snapback rally.
**Weekly Perspective:**
– While the rally was impressive on an intraday basis, AUD/USD remains within a broad trading range on the weekly chart.
– Key support on the downside is located near 0.6570, while sustained upside momentum would need to clear 0.6680 to challenge the late-May peaks.
### Macro Drivers Behind the Move
Several fundamental factors combined to help drive the AUD/USD turnaround:
**1. US Dollar Weakness:**
– The greenback lost ground across the board, pressured by speculation over
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