AUD/USD Forecast: Extra gains look likely above the 200-day SMA

• AUD/USD added to Friday’s uptick beyond 0.6500.
• The bounce in commodities underpinned the pair’s advance.
• The labour market report will be the next salient event.

The Australian dollar faced renewed buying pressure amidst the vacillating mood in the US dollar as well as some respite from the recent weakness hurting the commodity complex.

In fact, the US dollar kept the erratic performance seen as of late, maintaining the USD Index (DXY) in the low 104.00s amidst persistent investor speculation regarding a potential interest rate cut by the Federal Reserve (Fed) in either May or June.

Looking at internal factors, the Aussie dollar remained stuck within a consolidative phase in place since the beginning of the month, exacerbated at the same time by the overall bearish trend in the commodity market. On the latter, it is worth mentioning that prices of both copper and iron sparked a decent rebound at the beginning of the week after many sessions on the defensive.

Meanwhile, market participants continued to assess the latest interest rate decision of the Reserve Bank of Australia (RBA), which maintained rates at 4.35% while hinting at a potential future rate hike.

Regarding the RBA's Statement on Monetary Policy (SoMP), the bank slightly adjusted its inflation forecasts downward, expecting both indicators to remain below 3% by the fourth quarter of 2025. Additionally, the RBA revised its GDP growth projections lower, reflecting a less optimistic outlook for consumer spending and housing investments in the short term.

Meanwhile, as China continued to celebrate its New Year, concerns remained well in place regarding the country's inability to spark a meaningful and sustainable bounce in the aftermath of the coronavirus pandemic, at a time when disinflationary pressures appeared somewhat entrenched and threatened to further undermine any surviving hopes of a recovery on the relatively short-term horizon.

AUD/USD daily chart

AUD/USD short-term technical outlook

The resumption of the selling bias could prompt AUD/USD to initially challenge its 2024 low of 0.6468 (February 5). The loss of the latter could put a potential test of the 2023 bottom of 0.6270 (October 26) back on the radar ahead of the round level of 0.6200 and the 2022 low of 0.6169 (October 13).

On the upside, the important 200-day SMA at 0.6569 emerges as the next target of note before the intermediate 55-day SMA at 0.6641. The breakout of this zone may propel the pair to try the December 2023 top of 0.6871 (December 28), followed by the July 2023 peak of 0.6894 (July 14) and the June 2023 high of 0.6899 (June 16), all just before the critical 0.7000 level.

The Aussie dollar should clear the significant 200-day SMA to alleviate the downside pressure and allow a probable move higher in the near term.

The 4-hour chart indicates extra consolidation. In the meantime, a drop to 0.6452 appears on the cards when 0.6468 is cleared. On the bullish side, 0.6610 is an immediate barrier ahead of the 200-SMA at 0.6634. The trespass of this zone implies a probable advance to 0.6728. The MACD approaches the positive zone, while the RSI bunces to the 55 region.