**AUD/USD Technical Analysis: Pair Exhibits Volatility and Returns to Highs**
*Based on original reporting by Simon Gallagher, InvestingLive.com, with additional insights from FXStreet and other reputable financial sources.*
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## Overview: AUD/USD Seesaw Price Action
The AUD/USD currency pair has recently demonstrated significant volatility, with sharp movements both upward and downward. After experiencing these fluctuations, the pair has managed to return to session highs, suggesting that traders are keen on both quick profits and responding to short-term macroeconomic catalysts. The underlying factors influencing these movements are varied, including shifts in global risk sentiment, US dollar strength, economic data releases, and policy statements from both the Reserve Bank of Australia (RBA) and the US Federal Reserve.
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## Recent Volatile Movements
– **Sharp Downturns and Swift Recoveries**: In the last few sessions, the Australian dollar has been subject to marked sell-offs, quickly followed by rebounds. This has been exacerbated by both local Australian data and broad shifts in risk appetite.
– **Session Highs Revisited**: Despite earlier declines, the AUD/USD has shown resilience by climbing back to session highs, suggesting strong underlying demand for the pair on dips.
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## Key Drivers Behind Recent Price Action
### 1. Global Risk Sentiment
– The Australian dollar is considered a risk-sensitive currency. When global equity markets rally and risk sentiment improves, investors are often seen shifting capital into higher-yielding assets like the AUD.
– Conversely, risk-off events, such as geopolitical tensions or surprising economic data misses, often prompt a flight to safety, boosting the US dollar and weighing on the AUD.
### 2. US Dollar Movements
– The US dollar index (DXY) has experienced its own swings, driven by Federal Reserve policy expectations, US economic indicators (especially inflation and labor market data), and Treasury yield movements.
– Strength in US data or hawkish Fed rhetoric can lift the greenback, pressing the AUD/USD lower. On the other hand, any signs of US economic softening offer the AUD room to recover.
### 3. RBA and Fed Policies
– The Reserve Bank of Australia has taken a less aggressive stance compared to the Federal Reserve, causing moments of divergence in monetary policy expectations.
– Markets watch statements from RBA officials closely for hints of future rate moves, while the Fed remains in focus for clues about the trajectory of US rates and dollar liquidity.
### 4. Economic Data Releases
– Recent Australian data, such as employment figures, retail sales, and business confidence indices, have caused notable intraday swings in the AUD.
– In the US, inflation reports (Consumer Price Index), jobs data (Nonfarm Payrolls), and retail sales have all been major AUD/USD market movers.
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## Technical Analysis: Chart Breakdown
### **Short-Term Technicals**
– **Support and Resistance Levels**: The pair has demonstrated support near the 0.6580–0.660
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