AUD/USD Current Price: 0.6405
- The Australian Dollar successfully erased its losses against the Greenback.
- Conflict in the Middle East generates new concerns.
- The AUD/USD pair climbed above 0.6400, supported by a weaker Dollar.
The AUD/USD started the week lower due to developments in the Middle East over the weekend. However, during the American session, it reversed direction and rose to a one-week high above 0.6400, driven by an improvement in market sentiment.
The US Dollar lost momentum during the American session as stocks on Wall Street turned positive. Investors reacted positively to the comments made by Federal Reserve's Jefferson, who stated that he would consider higher Treasury bond yields when evaluating future monetary policy. Additionally, reports of Hamas being open to discussing a truce with Israel contributed to the rebound in stocks.
On Tuesday, the Australian Westpac Consumer Confidence for October and the National Australia Bank's Business survey will be released. In the US, there are no major reports scheduled for release. The crucial data of the week will be the inflation figures from the US, with the Producer Price Index (PPI)on Wednesday and the Consumer Price Index (CPI) on Thursday.
The AUD/USD pair could maintain its firmness if market conditions remain stable. The risk of a deterioration in market sentiment is being offset by a decline in Treasury yields.
AUD/USD short-term technical outlook
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The AUD/USD pair exceeded the 20-day Simple Moving Average (SMA) and the 0.6400 level on Monday, reinforcing its recovery from monthly lows. The technical indicators on the daily chart continue to show improvement for the Aussie, although the overall trend remains bearish.
On the 4-hour chart, the bias is tilted to the upside, supported by the Relative Strength Index (RSI) and Momentum, moving higher. If the pair remains above 0.6400, further gains are likely, with the next resistance is seen around 0.6430. Breaking above that level would shift attention to 0.6450. On the downside, immediate support lies at 0.6375. The positive tone would turn neutral if the pair drops below 0.6365, while a decline below 0.6345 could trigger a bearish acceleration.
Support levels: 0.6375 0.6340 0.6315
Resistance levels: 0.6430 0.6465 0.6500
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