**AUD/USD Focuses on January High as RBA Rate Decision Approaches**
*Adapted from Tony Sycamore, FOREX.com, with added analysis.*
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The AUD/USD currency pair entered the week with robust momentum amid widespread shifts in global market sentiment and anticipation surrounding the Reserve Bank of Australia’s (RBA) upcoming interest rate decision. The Australian dollar rallied higher, building on recent gains, as traders weighed macroeconomic developments both at home and abroad. This article will explore the recent performance of AUD/USD, key catalysts influencing its trajectory, and expert outlooks with consideration of the looming RBA statement and fresh inflation figures out of the United States.
## AUD/USD Rises Amid Shifting Market Sentiment
AUD/USD began the week trading slightly under the 0.6600 handle, sustaining the upward bias that emerged during the previous week. The pair advanced over 0.5 percent in last Friday’s session, bouncing from the 0.6500 region to a high near 0.6600, equating to its loftiest level since early February. This lifted AUD/USD closer to the pivotal resistance zone defined by the January peak at 0.6625.
Several factors contributed to bullish momentum in the pair:
– **Softening U.S. Dollar**: Friday’s U.S. jobs report showed a subdued increase in nonfarm payrolls and a modest uptick in the unemployment rate. This reinforced expectations that the Federal Reserve could begin cutting rates as soon as September.
– **Risk Appetite Returns**: Easing bond yields and resilient equity markets boosted overall risk sentiment, encouraging capital flows into risk-sensitive currencies like the Australian dollar.
– **China Data Stabilization**: Improved economic indicators from China, including manufacturing and trade activity, offered a moderate tailwind to the Australian dollar, as China remains its leading trade partner.
### Technical Overview: Approaching Key Resistance
On the daily chart, AUD/USD surged above the 200-day simple moving average for the first time in nearly one month. The pair now faces critical resistance at the 0.6625-0.6644 region:
– The January high at 0.6644
– A notable swing-high near 0.6625, previously tested and rejected multiple times in early 2024
Should the pair decisively clear these resistance levels, it would open the door for a retest of the late-2023 highs around 0.6870.
**Support Levels to Watch**:
– The round number of 0.6500, which capped Friday’s losses and served as a launching pad for the current rally
– The 200-day simple moving average near 0.6560, which if broken could signal a pause or reversal in the bullish trend
– The 50-day simple moving average near 0.6530
A failure to sustain the current upward momentum could result in a retest of these support zones.
## All Eyes on the Reserve Bank of Australia (
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