**AUD/USD Targets January Highs Ahead of Key RBA Rate Decision**
*Adapted and expanded from the original article by Matt Weller, Forex.com*
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The Australian dollar (AUD) continues to capture the attention of global forex traders as it edges closer to significant technical milestones against the US dollar (USD). This development comes as market participants anticipate the Reserve Bank of Australia’s (RBA) upcoming policy statement, a crucial event that could shape the currency pair’s trajectory in the weeks ahead. The evolving fundamental narrative, shifting rate hike bets, and key economic data releases add further complexity to the AUD/USD outlook. In this article, we will explore the current AUD/USD technical setup, the macroeconomic backdrop, the RBA’s policy dilemma, factors driving Aussie strength, and what traders should watch in the near term.
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### **Technical Landscape: AUD/USD Bulls Press the Advantage**
AUD/USD has caught a bid in recent sessions, rallying from recent support levels and threatening to challenge its highs from January 2024. Technical traders have taken notice as several key developments coalesce to underpin the bullish narrative:
– **Recovery From Support:** After correcting lower in early February, AUD/USD found a strong base just above the 0.6450 level. This area aligned with the 50-day moving average and a cluster of previous swing lows, providing strong support.
– **Upward Momentum:** Momentum shifted to the upside as buyers stepped in. The pair has since climbed toward the 0.6600 mark, brushing up against the January highs (approximately 0.6625).
– **Short-Term Moving Averages:** Both the 20-day and 50-day moving averages have begun to slope upward, further supporting the bullish tone.
– **Breakout Potential:** A confirmed daily close above 0.6625 would invalidate the recent consolidation range and suggest the rally has further to run, potentially opening a path toward 0.6700 or higher.
**Key Resistance and Support Levels:**
– **Resistance:**
– 0.6625 (January 2024 highs)
– 0.6700 (Psychological round number, last tested in November 2023)
– 0.6760 (200-day moving average)
– **Support:**
– 0.6550 (Short-term pivot and recent swing lows)
– 0.6500 (Descending trendline and psychological barrier)
– 0.6450 (50-day moving average)
Traders will be watching for a breakout or a rejection at these levels, particularly as the RBA event risk comes into play.
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### **Fundamental Backdrop: RBA’s Balancing Act**
The Reserve Bank of Australia’s February 2024 rate decision is the next major event risk for the AUD/USD pair. Amid a shifting global landscape, markets are debating whether the RBA will signal renewed hawkish intent or maintain its patient, data-driven stance.
#### **Market Expectations
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