**AUD/USD Rebounds from Weekly Lows: Key Factors Influencing the Forex Pair**
*Adapted and expanded from an original article by Sagar Dua on FXDailyReport.com*
The AUD/USD currency pair saw a significant move as it bounced off its weekly lows, managing a modest recovery that brought it to approximately the 0.6694 level. This development has drawn attention from forex traders and market analysts, who are keenly watching how economic data, market sentiment, and geopolitical risks will shape the trajectory of the Australian dollar against its US counterpart. This comprehensive review delves into the primary drivers of the AUD/USD action, the technical setup, and forecasts informed by the latest news and broader financial trends.
## 1. Recent Price Action: Technical Overview
– The AUD/USD pair descended to new weekly lows in early trading sessions before rebounding to the 0.6694 mark.
– Despite the bounce, the pair remains below recent multi-month highs recorded earlier in 2024.
– The currency pair’s movement has mostly tracked broad-based US dollar trends and responses to recent Australian and US economic releases.
### Chart Patterns and Support/Resistance
Technical analysts identify key levels for AUD/USD:
– **Immediate Support:** Around 0.6670, a psychological and technical floor that previously provided buying interest.
– **Resistance Levels:** 0.6725 and 0.6750 stand as immediate barriers that bulls must overcome to sustain a rally.
– **Moving Averages:** The pair hovers near its 50-period and 200-period moving averages on the 4-hour chart, indicating a lack of clear directional conviction.
– **Momentum Indicators:** The Relative Strength Index (RSI) recovered from oversold territory, suggesting that sellers may be losing steam in the short term.
## 2. Fundamental Drivers: Economic Data and Central Bank Moves
### Australian Dollar Side
– The **Australian dollar** often acts as a barometer for global risk appetite due to Australia’s resource-heavy economy.
– **Macroeconomic Health:** Recent data from Australia, including retail sales, labor market figures, and inflation reports, have broadly painted a picture of moderate economic momentum.
– **Reserve Bank of Australia (RBA):**
– The RBA recently held its policy rate steady, as expected, highlighting ongoing concerns about inflation persistence but also cautiously optimistic economic outlook.
– Futures markets are pricing in a pause in further rate hikes, with some speculation about possible rate cuts in late 2024 if economic growth slides.
– **Chinese Demand:** Since China is Australia’s largest trading partner, fluctuations in Chinese import demand for key commodities like iron ore and coal also weigh heavily on AUD/USD.
### US Dollar Side
– The **US dollar** remains in focus amid shifting expectations around Federal Reserve policy.
– **Federal Reserve Outlook:**
– The US Federal Reserve has delivered a series of rate hikes since 2022, but recently shifted to a data-dependent pause amid softer inflation numbers.
Read more on AUD/USD trading.