**AUD/USD Edges Into Fourth Consecutive Gain: Analysis and Outlook**
*Based on original reporting by Haresh Menghani for FXStreet, with additional context and expanded analysis.*
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The Australian dollar (AUD) climbed higher against the US dollar (USD) for a fourth consecutive session, highlighting renewed momentum for the Aussie. The AUD/USD pair demonstrates notable resilience, bolstered by both domestic developments and global factors influencing risk sentiment and the greenback’s strength. In this expanded analysis, we examine the forces driving this stretch of gains, delve into recent economic events affecting both currencies, analyze technical indicators, and offer insights into what the near term may hold for the pair.
## Recent Performance: AUD/USD Tracks Four-Day Rally
The AUD/USD currency pair recently notched its fourth straight daily increase, closing in on key technical barriers and attracting increased attention from traders:
– The pair hit short-term highs in the 0.6480 area, reflecting a steady climb since rebounding from lows established earlier in the month.
– The uptick is observed amid generally improving market risk appetite, less aggressive bets on US Fed rate hikes, and a pickup in Australian economic sentiment.
This positive momentum marks a significant turnaround for a pair that faced sustained downside pressure in previous weeks.
## Underlying Drivers of the AUD/USD Rally
Several macroeconomic and market factors have come together to support the Australian dollar in its recent gains:
### 1. Shifting US Dollar Sentiment
– Recent weaker-than-anticipated US macroeconomic data, including lower Durable Goods Orders and softer labor market readings, have curbed the strength of the US dollar.
– Investors now expect the Federal Reserve to maintain steady rates for a longer period and are less inclined to price in further tightening measures.
– This change in outlook has pressured US Treasury yields, weighing on the currency broadly.
### 2. Positive Risk Sentiment
– Risk-sensitive currencies like the Australian dollar tend to gain when equity markets rise and volatility subsides.
– Improved sentiment regarding China, Australia’s largest trading partner, has also spilled over to support the AUD.
– Hopes for continued fiscal stimulus and accommodative monetary policy measures in China are underpinning commodity prices, notably iron ore, which is central to Australia’s export sector.
### 3. Domestic Factors in Australia
– Recent Australian economic releases, such as improvements in retail sales and continued strength in the labor market, have strengthened the case for resiliency in the Australian economy.
– The Reserve Bank of Australia (RBA) has issued relatively cautious guidance, but market participants believe the next policy move is likely to be a rate cut rather than a hike, which provides a predictable environment for traders.
### 4. Technical Dynamics
– The rally has been partially fueled by a short-squeeze, with traders covering earlier bearish AUD positions as the pair moves past key technical resistance levels.
## Latest Economic Data: A Closer Look
Both the US and Australian economies have provided important data points impacting currency movement, including:
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